Erik Erikson s Development Theory - 1408 Words

Erik Erikson’s Development theory Erik Erikson’s was born June 15, 1902, in southern Germany, His Jewish mother Karla Abrahamsen and to biological father, who was on unnamed Darnish man. Erikson’s biological abandoned him before he was born. Erikson was brought up by his mother and stepfather, Theodor Homberger, who was Erikson’s pediatrician. He never knew the true identity of his biological father. He always was in search of his identity; Erikson’s search for identity took him through some difficult experiences during his adult developmental stage. During his school years, Erikson studied art and several languages instead of other subjects. Erikson never liked formal schooling, he was very independent scholar. When Eriskon graduated high school, he was interested in becoming an artist. Around 1920, he decided to travel Europe but he had to sleep under bridges (Boeree, 1997). After he traveled around Europe for a year, he made the decision to enroll in an art school back in Germany. Erikson stayed at the art school for several years, so he began to teach art and other subjects to the American children who came to Vienna for Freudian training (Sharkey, 1997). Erik Erikson has made numerous contributions to society as a psychologist. His developmental theory had a great impact on the way to understand psychology in modern world. There is not dough that all of his professional accomplishments have leaded us to a better understanding of the field of psychologyShow MoreRelatedErik Erikson s Theory Of Development Essay1635 Words   |  7 PagesMany theories have been written on the subject of human development. Each theory has been further postulated and dissected to include: social, emotional, mental, and biological development. Many theoretical approaches and frameworks have been formulated to offer possible explanations for human behavior. It is paramount for social workers to have a working knowledge of these various theoretical approaches in order to identify and assess their client’s needs effectively. Theories provide basic hypothesesRead MoreErik Erikson s Development Theory1603 Words   |  7 PagesErik Erikson’s l ifespan development theory has proven to be popular and applicable to many people. However, Erikson’s theory was a bit bias and generalized groups of people whose cultures, genders and environments did not apply to his theory. This paper will focus on Erikson’s last four stages of development, and discuss how each stage may be impacted by these various factors. Identity vs. Role Confusion The adolescence stage of development in Erikson’s theory was labeled as identity vs. role confusionRead MoreErik Erikson s Theory Of Psychosocial Development Essay1366 Words   |  6 PagesAbstract Erik Erikson (1902-1994) provided a new perspective of psychosocial behavior and development while expanding on the works of other theorists. Erikson believed there to be eight stages of psychosocial development which a person transitions through. These stages start at birth and end with old age/death. Erikson’s work is used throughout many outlets of social work. Social workers use this information to help them figure out what is going on with clients and how best to help them. Erikson providesRead MoreErik Erikson s Theory Of Psychosocial Development Essay1177 Words   |  5 Pages Erik Erikson was born in Greman in 1902-1994, American psychoanalyst; known for psychosocial theory of emotional development of human beings. His theory looks at the impact of parents and society on personality development from childhood to adulthood. Erikson believes, each person has to pass through a series of eight stages over there entire life cycle. I will look at the first 3 stages that cover the childhood years. There are set of conflict at each stage, which allows individual to developRead MoreErik Erikson s Theory Of Psychosocial Development884 Words   |  4 PagesErik Erikson Erik Erikson was born June 15, 1902. Erikson is best-known for his famous theory of psychosocial development and the concept of the identity crisis. His theories marked an important shift in thinking on personality; instead of focusing simply on early childhood event, his psychosocial theory looked at how social influences contribute to personality throughout the entire lifespan. Erik Erikson died May 12, 1994 due to prostate cancer. (Erik Erikson, 2015). Stages of Psychosocial DevelopmentRead MoreErik Erikson s Psychosocial Development Theory1518 Words   |  7 PagesABSTRACT This research paper will show a thorough review of Erik Erikson s Psychosocial Development Theory, specifically the transition from adolescence to adulthood. Psychosocial Development, according to Erik Erikson, is a continuity of crisis throughout our lifespan; these challenges will shape our personality and the way we perceive our surroundings. In addition to this, the different stages mentioned in this Theory complement each other and help us to develop the tools to achieve a sense ofRead MoreErik Erikson s Theory Of Psychosocial Development1445 Words   |  6 PagesErik Erikson was an ego psychologists who developed one of the utmost popular and prominent theories of development. While Erikson’s theory was influenced by psychoanalyst Sigmund Freud s work, Erikson s theory centered on psychosocial development rather than psychosexual development. Erik Erikson s theory of psychosocial development is one of the best-known theories of personality in psychology. Much like Sigmu nd Freud, Erikson believed that personality develops in a series of stages. UnlikeRead MoreErik Erikson s Theory Of Psychosocial Development1818 Words   |  8 Pagesinfluential theories in developmental psychology, which is Erik Erikson’s theory of psychosocial development. It is a very interesting theory, and although it was influenced by Sigmund Freud, it centers more on the social component rather than the psychosexual stand of Freud. According to Erikson, our personal development occurs as we interact daily with others and have new experiences that shape us throughout our lives. This paper will review the eight stages of the psychosocial theory: 1. TrustRead MoreErik Erikson s Theory Of Human Development Essay1750 Words   |  7 PagesIntroduction The eight stages of Erik Erikson’s psychosocial theory of human development is a theory which describes different stages of a person’s life and the challenges which they must overcome in that specific stage (Arnett, 2016). There will be two interviews conducted with individuals that are in age groups ranging from early adulthood to middle adulthood and that are in different stages of Erikson’s theory. The interviews will be connected to the stages Erikson said they should be in accordingRead MoreErik Erikson s Theory Of Psychological Development2113 Words   |  9 PagesErik Erikson has been classified as one of the greatest and most influential psychoanalysts of all time. His theory is one of the best known theories of psychological development. Erikson’s theory talks about how personalities develop over different stages of life, compared to Sigmund Freud’s theory of psychosexual stages of life (Sharkey, 1997). One of the greatest reasons why Erikson was interested in psychology was because of things that happened in his early life. Erikson learned a lot from just

Should College Sports Be Paid - 2868 Words

Division I college athletics have come a very long way since its original erection in the late 1800s as only something that occurred at the Ivy Leagues. Today, there is now a side which advocates for paid compensations for college athletes (this is mostly focused in football and basketball). According to the NCAA s current policy on intercollegiate compensation the athlete first must be considered an amateur. This rule that is in place is extremely redundant because in order for a student to be eligible to be an NCAA student athlete they have to be considered an amateur. This means that, basically as of right now, there is no strongly enforcing rule that is in place to determine whether or not athletes should be paid. The world of college sports has grown rapidly over the past few decades with new television broadcasting contracts, video games, and overall popularity; making it a legitimate broadcasting rival to pro sports leagues such as the NFL or NBA. The reason why college sports have become so popular is due to the increased demand for television games which stems from the excitement of the teams playing. College sports are what they are today because of the players who have become increasingly more exciting to watch. Under normal circumstances, one would be in agreement with the notion of paying a student athlete that is on a team bringing in money from broadcasted and sold out games as a form of compensation. I am on the opposite side of this argument. TheShow MoreRelatedShould College Sports Be Paid?1680 Words   |  7 Pagesknown as the National Collegiate Athletic Association (â€Å"NCAA†) (Gregory). College sports have become more popular than ever before, especially with the help of television and modern technology. Making over $700 million a year, this industry has been introduced numerous times over the years to the debate of prohibiting payments to athletes other than athletic scholarships (Goldman). Currently, in order to mee t the demand of sports, especially at a Division I University, high school athletes are recruitedRead MoreShould College Sports Be Paid?1732 Words   |  7 Pagesplayers were paid, you wouldn’t see players like Michael Jordan, Hakeem Olajuwon, or Ralph Sampson on different teams. It would be the college with the most money, could pay the best student-athletes, the most money and Cinderella stories for the most part would disappear. Dynasties of college sports would be made. Money would ruin college sports more than it already has. It has already stripped championships, ruined players images and futures, and tarnished reputations of colleges. The Fab 5Read More Should College Athletes be Paid? Essay1510 Words   |  7 Pagescontroversies with sports is, should student athletes be be paid a salary? Some people believe that they should be paid and others would completely disagree. Even though they technically are being paid, they really are not. The only type of way the athletes would be paid is through financial aid or if they have a job. Only their education is being paid by the school. Although some people believe that they should be paid, it would not be a good idea at all. So college athletes should not be paid at all becauseRead MoreThe National Collegiate Athletic Association1227 Words   |  5 Pagesthat college athletics is a $10-billion marketplace† (Suggs). With huge sums of revenue generated from college sports teams, players for the successful teams appear to be very marketable. â€Å"The National Collegiate Athletic Association, the largest collegiate sports organization in the United States, oversees much of the business of American college sports. For 2011-12, the NCAA reported $871.6 million in revenue-- 81 percent of which came from a broadcast rights agreement with Turner/CBS Sports. AnotherRead MoreShould College Athletes Get Paid?1742 Words   |  7 PagesShould College Athletes Get Paid? Should college athletes be paid? This has been a controversial topic ever since college sports started. Many people argue that they should. Many people argue that they should not. College athletes should get paid because they work extremely hard playing their sport. The people that say they should be paid argue that the amount of time athletes dedicate is equivalent to a full-time job, and maybe even more. The people that say they should not get paid argue that collegeRead MoreWhy College Athletes Should Not Be Paid1301 Words   |  6 PagesNovember 2015 Why College Athletes Should Not Be Paid What amount of money should college athletes be paid? This has been a controversial question for many years.Some lower level Division One NCAA athletes think that their scholarships do not pay them enough as it is, and instead they want cash rather than the scholarship. These situations have been taken to court and arbitrated in NCAA hearings. The NCAA, or the National College Athletics Association, has declined for the athletes to be paid a salary everyRead MoreNCAA aAhletes and Pay 1142 Words   |  5 PagesShould college student-athletes be paid has become a much debated topic. The incentive for a student-athlete to play a college sport should not be for money, but for the love of the game. It has been argued that colleges are making money and therefore the student-athlete should be compensated. When contemplating college income from sporting events and memorabilia from popular sports, such as football and basketball, it must not be forgotten that colleges do incur tremendous ex pense for all theirRead MoreShould College Athletes Be Paid?1713 Words   |  7 PagesCollege sports are one of the largest and fastest growing markets in today’s culture. With some college sports games attracting more viewers than their professional counterparts, the NCAA is one of the most profiting organizations in America. Recently there has been controversy in the world of college sports as to whether the college athletes that are making their universities and the NCAA money should receive payment while they are playing their respective sport. Many believe that these athletesRead MoreShould College Athletes Be Paid?1364 Words   |  6 PagesHave you paid attention to all of the news that has been surfacing about collegiate sports lately? It is a big topic now days in the world of sports on weather college athletes should be getting paid to play sports. College athletics have gained great popularity of the past few decades, and have brought schools lots of revenue. A lo t of college athletes think they should be getting paid for their services they do for their school. College sports like basketball and football generate over six billionRead MoreStudent Athletes Being Paid or Not700 Words   |  3 PagesStudent Athletes Being Paid or Not College athletics today are enormous compared to the size that it was many years ago, especially in the region that I live in which is SEC country, should student athletes that have contributed to this growth be compensated for their contributions or not. With many big television deals and high ticket pricing this has been a topic that has become a constant in the minds of many. This topic is beginning to gather legs and making a move to the forefront of the NCAA

Balancing of Rotating Machines Free Essays

BALANCING OF ROTATING MACHINES The first thing to be explored to control vibrations is to try to alter the source so that it produces less vibration. This method may not always be feasible. Some examples of the sources of vibration that cannot be altered are earthquake excitation, atmospheric turbulence, road roughness, and engine combustion instability. We will write a custom essay sample on Balancing of Rotating Machines or any similar topic only for you Order Now On the other hand, certain sources such as unbalance in rotating or reciprocating machines can be altered to reduce the vibrations. This can be achieved, usually, by using either internal balancing or an increase in the precision of machine elements. The use of close tolerances and better surface finish for machine parts (which have relative motion with respect to one another) make the machine less susceptible to vibration. Of course, there may be economic and manufacturing constraints on the degree of balancing that can be achieved or the precision with which the machine parts can be made. The presence of an eccentric or unbalanced mass in a rotating disc causes vibration, which may be acceptable up to a certain level. If the vibration caused by an unbalanced mass is not acceptable, it can be eliminated either by removing the eccentric mass or by adding an equal mass in such a position that it cancels the effect of the unbalance. In order to use this procedure, we need to determine the amount and location of the eccentric mass experimentally. The unbalance in practical machines can be attributed to such irregularities as machining errors and variations in sizes of bolts, nuts, rivets, and welds. In this section, we shall consider two types of balancing: The static unbalance can be corrected by removing (drilling) metal at the chalk mark or by adding a weight at 180 ° from the chalk mark. Since the magnitude of unbalance is not known, the amount of material to be removed or added must be determined by trial and error. This procedure is called single-plane balancing, since all the mass lies practically in a single plane. †¢The single-plane balancing procedure can be used for balancing in one p lane that is, for rotors of the rigid disc type. If the rotor is an elongated rigid body, the unbalance can be anywhere along the length of the rotor. In this case, the rotor can be balanced by adding balancing weights in any two planes. For convenience, the two planes are usually chosen as the end planes of the rotor. However, in many practical applications, such as turbines, compressors, electric motors, and pumps, a heavy rotor is mounted on a lightweight, flexible shaft that is supported in bearings. There will be unbalance in all rotors due to manufacturing errors. These unbalances as well as other effects, such as the stiffness and damping of the shaft, gyroscopic effects, and fluid friction in bearings, will cause a shaft to bend in a complicated manner at certain rotational speeds, known as the whirling, whipping, or critical speeds. Whirling is defined as the rotation of the plane made by the line of centers of the bearings and the bent shaft. Reference link: http://classof1. com/homework-help/engineering-homework-help How to cite Balancing of Rotating Machines, Papers

History of the Restaurant Essay Example For Students

History of the Restaurant Essay The word restaurant according to the majority of contemporary dictionaries is defined as an eating-place, an establishment where meals are prepared and served to customers. By this definition, restaurants, by whatever name they have been given, are almost as old as civilization (Davidson, 1999). Modern historians, however, take a different view, that restaurants are a recent innovation and can be defined as a particular establishment where one goes to select prepared items of food, arranged on an individual plate, for a predetermined fee. Where ones sits at individual tables, alone or with acquaintances and samples exotic dishes, these are the constituents for what we commonly address as the restaurant. Contrarily, inns and taverns have served food to hungry patrons for millennia but I am not concerned with the mere serving of food, in this essay I will focus instead on how and where it is served. A restaurant, of the original meaning was the name for a restorative broth, a thing rather than a place. In the fifteenth century a restaurant was a consomm or bouillon (Spang, 2001) cooked with precious gemstones, which, as it was rumoured, had medicinal uses and instigated good health. Up until the eighteenth century, restaurants were for those too fragile to eat a solid meal at night. Restaurants were cooked often without the addition of any liquid and sometimes composed purely of meat, cooked for so long that all of the matter, including bone, flesh and skin, had broken down to liquid essences, allowing it to reach the consumer partially digested. Restaurants were eaten, or drunk rather, in a restaurateurs room, where one lounged and sipped quietly and there was no socialising or frivolity, perhaps like an 18th century urban spa for the delicate (Flandrin Montarri, 1999). In 1765 a man named Boulanger, also known as Champ d Oiseaux (Flandrin Montarri, 1999), purveyor of a restaurateurs room near the Louvre, was not content in just serving restaurants to the frail. Boulanger began to serve sheep feet in a white sauce, which stepped largely on the toes of the caterers guild. The French work force at the time was highly compartmentalised and held together with bylaws into twenty-five different guilds. The butchers were to sell raw domestic meat, only rotisseurs sold prepared game, charcutiers sold sausages and hams, vinegar-makers sold vinegar, pastry-cooks sold pastry (Flandrin Montarri, 1999) and the caterers guild monopolised the market in being the only cook-caterers legally able sell full meals to large parties. These traiteurs (cook-caterers) filed suit, as no tradesman was legally able to combine these functions as to what would be the constituents of todays restaurant. Boulanger was accused of selling not a restaurant but a ragout (Spang, 2001) and this case went all the way to the French High Court. To the bewilderment of Parisian society the judgement was found in Boulangers favour but after a series of appeals the courts found in fav our of the caterers guild. Restaurateurs were banned from selling anything other than a bouillon and sadly they never formed a guild of their own. Boulanger has been accredited with the invention of the restaurant proper but this is unfounded and the real restaurant came from another proprietor of a restaurateurs room (Spang, 2001). Mathurin Roze de Chantoiseau, the son of a merchant and landowner, moved to Paris in the early 1760s and tried to get going an assortment of ideas he believed would enrich him and his country at the same time. He had many interests and several occupations; he tried twice to set up an odd system of credit to get France out of economic crisis, was a purveyor of restaurants, founder of a private bank, manager of an information office and organizer of an information directory. In 1766, Roze launched an establishment in Paris that alleged to serve only those foods that either maintain or re-establish health. (Spang, 2001) This is accredited as the first proper restaurant. .u35c5833d2c68e59009d65f710000dbcb , .u35c5833d2c68e59009d65f710000dbcb .postImageUrl , .u35c5833d2c68e59009d65f710000dbcb .centered-text-area { min-height: 80px; position: relative; } .u35c5833d2c68e59009d65f710000dbcb , .u35c5833d2c68e59009d65f710000dbcb:hover , .u35c5833d2c68e59009d65f710000dbcb:visited , .u35c5833d2c68e59009d65f710000dbcb:active { border:0!important; } .u35c5833d2c68e59009d65f710000dbcb .clearfix:after { content: ""; display: table; clear: both; } .u35c5833d2c68e59009d65f710000dbcb { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .u35c5833d2c68e59009d65f710000dbcb:active , .u35c5833d2c68e59009d65f710000dbcb:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .u35c5833d2c68e59009d65f710000dbcb .centered-text-area { width: 100%; position: relative ; } .u35c5833d2c68e59009d65f710000dbcb .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .u35c5833d2c68e59009d65f710000dbcb .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .u35c5833d2c68e59009d65f710000dbcb .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .u35c5833d2c68e59009d65f710000dbcb:hover .ctaButton { background-color: #34495E!important; } .u35c5833d2c68e59009d65f710000dbcb .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .u35c5833d2c68e59009d65f710000dbcb .u35c5833d2c68e59009d65f710000dbcb-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .u35c5833d2c68e59009d65f710000dbcb:after { content: ""; display: block; clear: both; } READ: Does Congress Have Too Much Power Over Commerce? EssayRoze was neither a creative connoisseur nor an imaginative chef; needless to say, the invention of the restaurant was one of Rozes many commerce driven ventures that set out to salvage France from debt. Through the motion of credit notes, Roze proposed to resolve the .

The Film, witness, shows the audience a clash of different cultures that come together briefly but cannot mix free essay sample

It is clear that the clash of the Amish and mainstream American society cannot mix, as shown in the film Witness. Although the cultures meet out of necessity in the film, the relationship between John Book and Rachel Lapp doesn’t eventuate, Eli and Book disagree on their ideas of justice, and the lifestyles of the two different societies are often incompatible. (When Samuel is involved in the murder it is quite incompatible that they have to stay in the city without any family support and also have to stay with Elaine). John and Rachel’s relationship does not eventuate much as they are both from different cultures which makes it difficult. There are many scenes that John and Rachel appear together in. The first time is after Samuel had witnessed the murder in the toilet cubical. It was an awkward start to their relationship as Rachel did not want her son involved in a questioning with a strange man. We will write a custom essay sample on The Film, witness, shows the audience a clash of different cultures that come together briefly but cannot mix or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page She was on her way to see her sister. Been told she had to wait so her son could be questioned was not the plan. Throughout the film their relationship becomes stronger but because of the different cultures that they come from it would be very difficult for them to actually be in a relationship. The cultural backgrounds would mean having to make other sacrifices. This is why this is an example of people and cultures that come together but can’t mix. Eli and Book disagree on their ideas of justice. The difference between the Amish and the â€Å"English† is often shown to be incompatible in Witness. One such occasion when this occurs is in the scene where Rachel and Samuel accompany Book to the police station shortly after the murder investigation starts. Rachel is not happy with exposing her son to an atmosphere of violence, as shown by her stern body language and her displeasure of being around Book, who she says seems to enjoy â€Å"whacking people†. The aggressive policing tactics used by book in the investigation do not agree the Amish view that violence is never the answer. The clash of violent and non-violent societies in Witness shows that the Amish and mainstream Americans are not compatible. The Film, witness, shows the audience a clash of Amish and mainstream American society cultures that come together briefly but cannot mix. This is shown by the relationships that can’t go ahead because of the sacrifices that would have to be made for the relationship. Also the way that each of the cultures act towards punishment caused quite a lot of tension. Characters/ cultures clashing. Within the film there are definitely cultures that come together that should not stay together. ?

Reasons for Human Population on Santa Rosalia essays

Reasons for Human Population on Santa Rosalia essays The fact that the island was remote and uninhabited, the Captain was incompetent, the colonists were flexible, and Mary Hepburn had a genius plan of artificial insemination all kept the population of humans on Santa The Galapagos islands, being located west of the Peruvian coast, "separated from the mainland by one thousand kilometers of very deep water, very cold water fresh from the Antarctic" (Vonnegut 3). The islands are described as a "sailor's nightmare where the bits of land were mockeries, without safe anchorage or shade or sweet water or dangling fruit, or human being of any kind" (17). Santa Rosalia was the "northernmost of the islands, so all alone, so far from the rest" (43). However remote, the islands were mysteriously occupied with life forms such as geckos, rice rats, lava lizards, spiders, ants, grasshoppers, and tortoises. What Darwin referred to as magic for these animals to have lived on these islands, also proved to be magic for those aboard Bahia de Darwin as well. Another contributing factor to the colonists' survival was the inadequate Adolph von Kleist. In fact, we are told that the "combination of the Captain's incompetence . . . has turned out to be of incalculable value to present-day humankind" (139-40). If the ship had ever reached Balta, which the Captain desperately wanted to do, those aboard "would have found it devastated and depopulated by yet another package of dagonite" (233). His incompetence kept the ship at sea for dayshe had no map and continued to rely on his "big brain," which was misleading him. He kept steering the ship to put the sun where it was supposed to be, according to his big brain. We are later told that the ship was sailing far too north. (243). About a week later, they are still lost, with the Captain still "turning the ship this way and then that way" (247). In addition, as Leon tells us that if the Captain...

Health Management Information System Governance and Policy Research Paper

Health Management Information System Governance and Policy - Research Paper Example The system also has the role of providing warnings in case of a foreseen epidemic and thus contributing towards future planning, creating a conducive research and reporting environment. This paper tries to explain different strategies as laid out by the U.S government aimed towards the general improvement of Health Information system. It also talks about how an effective HIS should function. Health Information Systems (HIS) can be defined as â€Å"a set of components and procedures organized with the objective of generating information which will improve health care management decisions at all levels of the health system.† (Lippeveld, et al., 2000). The World Health Organization (WHO) defines health systems as â€Å"all organizations, institutions and resources devoted to producing health actions.† It encompasses central, regional, district, community and household levels. These health systems also incorporate two important components; dissemination and communication. The primary goal of a HIS is to allow making of transparent and sound decisions in a health environment. The performance of HIS can be measured by the quality of data produced and the population’s health status. The HIS should incorporate the parameters of demand, supply and generation level of the health system at which data is generated and used. Factors such as input, output and health determinants make up components of demand. Supply involves sources of generating data either relative to population as a whole or those concerned with the operation of services. Presentation of data varies at different levels and at low levels, use of charts is preferred. From here, indicator components are then analyzed and results used to make reports. The HIS allows for making of sound decisions based on four key components; generation of data, compiling collected data, analyzing and coming up with results and communicating new information and implementing it. Assessment of performance of an effective

Did the frontierhelp shape American individualism Assignment

Did the frontierhelp shape American individualism - Assignment Example It took centuries of efforts and sacrifices before the country achieved its illustrious and commanding status in the world. If not for these events, it will just be another nation that would want to make a name for itself. For new frontiers to be discovered and developed, vast efforts were undertaken by generations of people who have dreamt of reaching not just fame for people as individuals but for the nation as a whole (Hoover, 2005). As Turner (1893) stated on his essay The Significance of the Frontier in American History, the frontier is the borderline of barbarism and development. The 300 years in the history of the United States and its people serve as the frontier of the land. Though the actions and strategies that were taken during these years were truly primeval compared to the ideologies and designs which are being used in recent years, they are responsible for many important details and events in history. The most important contribution or event by these primeval acts is the liberation of the land from its colonizers. This single event transformed a land to a civilized nation. Three hundred years of struggle can be considered as baby steps to the present pace of the country in different aspects of the society and governance. If not for these baby steps, the nation would not be capable of taking leaps that have made their mark in world history. What used to be desert and unplowed lands are now either cultivated fields or modernized cities. If there would be one thing that the present Americans should learn from their forefathers is the fact that during the three-century frontier, they fought for the land as a whole and not on a per state basis. This should be considered if the present nation would like to sustain its stature and the ability to adapt to changes that are being consistently undertaken not just by the Americans

Managing Work Activities Assignment Example | Topics and Well Written Essays - 2000 words

Managing Work Activities - Assignment Example Accounting and finance is concerned with an analysis of the budget in the business in order to minimize costs and maximize savings. Finally, the Legal function takes care of any business contracts with all stakeholders, and also deals with compliance with domestic and international standards. All these functions complement each other especially following Nokia’s organizational structure. The office of the CFO ensures that there are enough funds to fund the budget and pay the staffs, thus making sure that the human resource and finance functions. Availability of funds and personnel eases the processes of marketing and customer service, since there are more people to do the work. By knowing what the consumer wants, the company is able to come up with products that meet the set legal standards, while also pleasing the customer. Q2: Explain the functionality of three departments of an engineering business of your choice, (which could be the engineering business established in assi gnment 1). Explain the importance and effects of each function on the operation of the company as a whole. The department for designing is the most significant in Nokia. This department determines the look of Nokia products, in addition to their various functionalities. Accordingly, this department has to create products that are appealing to the consumer, yet they are affordable and have high functionality. According to the Nokia website, the design department houses the solutions unit which is tasked with coming up with practical products that have varied content and are able to meet the personalized need of the consumer. Essentially, Nokia’s products should be able to offer solutions to some consumer needs, for example, the need to access the internet using a mobile device. While doing this, the design department needs to maintain low operational costs so that the company maximizes profits. It is the design department that ensures that Nokia stays in the market, by designi ng products that offer a competitive advantage with Nokia’s rivals. Without the designing department, Nokia would not be able to compete with other manufacturers, in the production of state-of-the-art products. Fundamentally, the design department is the one that ensures that Nokia remains relevant in the business, thus assuring the company’s survival. The human resource department is a very important department, since it is charged with the recruitment, training and sometimes, retraining of personnel. According to Griffin, a company needs to identify future human resource need s and recruit accordingly (232). Without this department, Nokia, and any other company would not be able to run operations, since machines cannot operate themselves. Human resource ensures that people with the right qualifications are employed and that they are trained to meet the standards at Nokia. Without the right workforce, Nokia would not be able to battle in the global market which has be come increasingly competitive in recent years. The sales and marketing department at Nokia ensures that the company has proper sales channels through engaging in product branding and promotional activities. In the current

Effects of Central Bank Independence on Inflation Rates

Effects of Central Bank Independence on Inflation Rates Abstract This paper analyses and explains the effects of central bank independence on a countrys inflation rates and its economic performance thereafter. It deals with the benefits believed to come along with independence and the delegation of monetary policy to the central bank, the determinants and accuracy of the index of central bank independence (CBI), and the different impact that CBI has on developed and developing countries. The studies and test conducted have shown that CBI lowers inflation in developed countries but in developing countries it might have the reverse effects, mainly due to the degree of independence, and factors like traditions, the law, and the statue of the economy which vary across countries. 1. Introduction This paper intends to study the relationship between central bank independence (CBI) and inflation levels among different countries; developing and industrialized. The main research problem that I intend to examine is whether central bank independence can lower the inflation rates of the countries that grant independence to their central banks, and whether this can lead to improved economic performance. What is discussed in this paper is not only whether central bank independence (CBI) can lower inflation and hence inflation variability, but also whether this can be achieved at low cost. The economies presented in the study include both those of the developed countries, e.g. the U.K., as well as those in transition e.g. Russia that have recently gained entrance in the EU. In this paper I analyze the impact of CBI on inflation, the benefits that are believed to come along with CBI and the factors used in measuring CBI. You will see that CBI can have different forms of measurement that produce slightly different results, hence the effectiveness of the CBI index is also analyzed. The reason for choosing this topic for further study is simply because during the past two decades there has been a considerable move towards central bank independence across several countries, with the belief that this will improve their inflation levels and thus contribute to economic growth. However, as you will see further on, this is not always the case, as some studies have revealed contradicting results, and economists and academics continue their studies to get a clerer picture of this issue. 2. The Spread of CBI and The Reasons for It To begin with, it is amazing how fast CBI has spread among countries and governments since the late 1980s. One simple explanation of this spread is A.Alesinas (1988; 845) statement: independent central banks have been associated with a lower average inflation rate and may have been responsible for reducing politically induced volatility of monetary policy and inflation 2.1 Should a central bank become independent? Folder (2005) explains that CBI was adopted to avoid possible disputes between political parties as a central bank is seen as a provider of information. Many economists have expressed their opinion on the spread of CBI; others have linked it to a way of avoiding the blame of political failure by some governmental parties (Miller, G. 1998, White 1994). Others have linked it to the infrequent changes of the government (de Haan and vant Hag, 1995). That is, central bank independence in many cases was adopted after periods of high inflation in order to reduce it, due to the inflation targeting function a central bank is capable of pursuing. It can also be associated with the attraction of foreign investment and hence economic growth as a consequence of the targets set and the autonomy with which the bank can then operate (Maxfield, 1997). In countries within the European Union, CBI is a perquisite following the Maastricht Treaty (1992) for adopting the euro currency. Overall and according to Folder (2005), independence has always been related to the adoption of anti-inflationary measures for pursuing monetary policy, but its explanation lies within the sociology of the financial elites and the politics legitimizing their policy preferences. The reasons behind achieving price stability through gaining central bank independence, Cukierman (1996) explains are several and include; the breakdown of other institutions like the European Monetary System (EMS) that had been responsible for maintaining price stability which is considered as the single and most significant objective of a central bank. Ilieva and Gregoriou (2005) suggest that in transition economies central bank independence has increased mainly due to the desire of such countries like e.g. Czech Republic, Poland, Romania, etc., to join the European Union and the acquis communautaire that applicant countries should adopt. As they continue to reason the addiction to CBI, they add that another incentive for CBI is the international financial institutions such as the IMF (International Monetary Fund) that require certain criteria to be met before making unconditional loans, and these criteria are feasibly met with the help of CBI. Also, countries are attracted to CBI as this will attract potential investors by improving the nations creditworthiness. Cukierman, A. (1996) analyses developments since the late 1980s to the legal independence of central banks and to its meaning; the measurement of CBI, the interaction of central banks with the government, its effect on the economy, its determinants, etc According to Cukierman, the trend towards CBI is due to a quest for price stability which is due to the following two reasons: First, following the stagflation of the seventies and the adverse economic performance of some high inflation countries, in Latin America and elsewhere, conventional wisdom concerning inflation and real growth has changed. Whereas during the sixties the accepted view was in line with Keynesian dogma, that some inflation is good for growth, during the eighties and nineties became that inflation and the associate uncertainties retard growth. (1996; 3) The good economic performance of Japan and Germany, countries with already low inflation added more value to the above concept. Second, the rapid growth and internationalization of capital markets raised the importance of price stability as governments and private investors sought to enhance their access to broadening world financial markets. (1996; 3) 2.2 Types of Central Bank Independence Independence with regards to central banking can be categorized into different groups, depending on the degree of freedom and the subject from which the central bank becomes independent. The major types of independence are; Legal independence, where the bank is partly accountable to the government and legislation provides a framework within which the central bank and the government cooperate on certain issues. This form of independence varies significantly among countries as it depends on how strong in the law in each country and the degree to which it is followed. However, the degree of legal independence, namely LVAW, as it will be shown below, has been used by many as a major index of measuring the degree of CBI. Goal independence refers to the case where the central bank is allowed to set its own goals, e.g. price stability, money supply, inflation targeting. However in most cases under this type of independence, the bank will decide on its goals with the confirmation of the relevant governmental departments. In this way, goal independence helps avoiding conflicts among fiscal and monetary policies, and increases the level of transparency and credibility of the central bank over its goals. Operational independence is the most common form of independence and is followed by many central banks around the world, for instance, the Bank of England since 1997. It involves the government setting the banks goals e.g. a 2% level of inflation, but the central bank being free to choose the instruments e.g. interest rates, to meet the targets set by the government. Another form of independence is managerial independence, by which the central bank has the power of appointing its own stuff, set its budget, etc. This form is a necessity for the existence of the other abovementioned forms of central bank independence and is therefore granted to all central banks that can call themselves independent. 2.3 The case for central bank independence There is a huge surge towards central bank independence by both the public and the governments, in the belief that independent central banks will not only achieve low inflation rates and price stability, but will subsequently lead to long-term economic growth and development. However CBI is an issue that needs further research before determining whether it should be adopted by all countries. This depends on the economic state of the country, whether it is a developed or a developing country or even on the demand of autonomy by the political parties within the country since by granting independence the government must pass to the bank the responsibilities of e.g. controlling the interest rates, etc. over which it used to have the power. Another issue that needs to be examined before granting independence to a central bank is the political stability and the degree of uncertainty within the country. This is because in times of uncertainty and instabilities, e.g. prior to elections, the public favours CBI as an independent central bank is more objective in its role and always forward looking without ignoring the long-term effects of its decisions. The majority of the parties affected by the actions of an independent central bank, i.e. the government as well as the general public are attracted by CBI because of the greater accountability and transparency the bank is equipped with when adopting a greater degree of autonomy. Moreover, it is expected to bring lower levels of inflation and this is the main reason why people welcome CBI and the number of central banks becoming independent has been increasing over the years. The main reason behind this expectation is because a central bank generally acts in favor of the public and in addition to the fact that it becomes free from the government and any political pressures, it is in a position to avoid short-term temptations regarding low interest rates which the government usually uses prior to electoral periods, for the sake of long-term low inflation and price stability, which in combination with other exogenous factors can result in economic growth. Moreover, when a central bank gains its independence through institutional reform it becomes capable of appointing its own governor thus it moves away from political interference, and can also set an explicit inflation target. Additionally and as Carlstrom, T.C. and Fuerst, S.T. (2006) explain independence helps a central bank in constraining the behavior of fiscal authorities. That is, it can prevent people and especially the government following fiscal policy from acting in their short-term best interests, recognizing that any actions taken in the short-term e.g. lowering the interest rates to attract investments, may become undesirable in the long-term, e.g. rising inflation levels as with higher demand from low interest rates, the prices will likely increase. In this way, CBI also prevents the fiscal authorities from inflating the short-term for delivering e.g. favorable exchange rates. Hence, monetary policy can run in a more credible way and following the targets set, markets w ill know what to expect thus shocks will be limited. However an independent central bank is also likely in extreme cases to bring so low levels of inflation that can be harmful to the economy. According to Epstein, G. (2007), the 3.5% drop in inflation levels by countries adopting an inflation-targeting monetary policy (IMF, 2006) is questionable as to whether this decline will improve economic growth. Explicitly, if the inflation level of a country is already low and the central bank adopts an inflation-targeting monetary policy then the resulting lower inflation level might prove dangerous to the economy by generating economic cycles. Cukierman (1996) has developed two separate approaches for reasoning the urge towards central bank independence and explaining the benefits that can be enjoyed from independence. These include; the theoretical approach according to which in the short-run monetary policy can be conducted in such a way that it allows for some inflation so that it can achieve employment, high economic activity and low interest rates. Hence, policy makers can expect some degree of inflation which they will present in the form of nominal wage and capital market contracts. In this way however, policy makers will have to keep inflation at a level that would balance the real equilibrium if they had been committed to zero-inflation. As a result of this discretionary use of monetary policy, this is subject to inflationary bias, and this bias can only be minimised if monetary policy is delegated to an independent central bank because only this institution is free to choose how to operate monetary policy and takes interest mostly if not only to price stability. And the empirical approach by which the case of CBI lies on empirical evidence showing that countries with an independent central bank have lower inflation rates and higher growth rates per capita output. An example of such a country is New Zealand: 2.3.1 The case of New Zealand New Zealand is a country whose central bank managed to drop the inflation level after being granted with greater independence. The Reserve Bank of New Zealand was granted independence in 1989 following the Reserve Bank of New Zealand Act of 1989 and had therefore established an explicit inflation target. The result was to reduce inflation levels from 7.6% during the years 1955-1988 from when the reserve bank was not independent, down to just 2.7%, after becoming independent, during the period 1989-2000. The latter rate is now considered one of the lowest among industrialized countries. It is obvious that among all OPEC countries, the central bank of New Zealand managed to achieve the lowest inflation rate, especially during the 1990s. What happened during the period of the inflation reduction was that the reserve bank of New Zealand went through a reform that resulted in it being granted with independence and a greater degree of autonomy, leading to low inflation. Specifically, prior to 1989 it used to be an arm of the government. Monetary policy used to be subject to the ministry of finance and therefore the government. As a result, the level of independence was one of the lowest among industrialized countries, while the level of inflation was of the highest. Even then, the relationship between central bank independence was negative, even though the results were the reverse of what is considered optimum, i.e. greater independence, lower inflation. In 1989, the Reserve Bank of New Zealand Act was passed by law. This act codifies inflation targeting and gives more autonomy to the countrys central bank in order to meet its objectives. According to the Act the central banks primary function is: to formulate and implement monetary policy directed to the economic objective of achieving and maintaining stability in the general level of prices. (Reserve Bank of New Zealand Act, 1989 as quoted in Carlstrom T.C. and Fuerst, S.T., 2006, p.3). The impact of the Act on New Zealands economy and specifically the Reserve Banks autonomy can be seen in figure 2 below, which compares the degree of independence across different time periods and among different countries. The findings of the New Zealand case show that if the country had adopted independence earlier then its average inflation rate would be 3.4% rather than 7.6% that it actually used to be, assuming all other things being equal. Following this assumption, CBI itself would be sufficient to reduce worldwide inflation levels from 5.6% down to 3.8%. Despite the considerable drop in New Zealands inflation rate it is still questionable whether this drop was caused solely by CBI, and it is difficult, if not impossible, to quantify by how much the inflation reduction was due to CBI. Firm conclusions cannot be made yet since the data used in this case is of limited sample size and comparisons would therefore be insufficient. What is true is that the relationship between CBI and inflation is similar across time. Any changes to the strength of this relationship are mostly due to macroeconomic and other factors such as the state of the economy, the state of the government, e.g. democracy, etc. and others that will be explained later in this paper. 3. Measuring Central Bank Independence The degree of CBI for each central bank varies according to the state of each country and to compliance with the law. As Cukierman explains, in developing countries where compliance with the law is poor, a suitable proxy for CBI would be the turnover of central bank governors, whereas in industrialised countries such a proxy would be legal independence. Generally, when the appropriate index of independence is used, the results indicate an inverse relationship between CBI and inflation. However, care should be taken not to mistake legal independence with actual independence, as legal independence is necessary but does not guarantee actual independence; legal independence is a necessary, but not a sufficient condition for a truly independent CB. (Cukierman, A., 2001; 7). Exceptions exist, like developed countries, where legal independence seems to be a good proxy because law is highly complied. For a clearer picture of the effectiveness of CBI on the economy, it is preferred that some variables that make up the CBI index are used in combination, or that some indices are used only for a specific purpose. For instance, legal independence is a good proxy for actual independence in developed countries rather than in developing ones. 3.1 The Cukierman Index of CBI The method that will be used the most in this paper to measure the degree of central bank independence and its relationship with inflation will be Cukierman Index (1992), the most widely accepted and used index for this purpose. Initially, the exact definition of the Cukierman Index according to Siklos, P. (1992; 65) is: An indicator of the degree of autonomy enjoyed by several central banks. Cukierman Index to demonstrate graphically the measures of CBI and inflation during two different decades, namely the 1980s and the 1990s: As can be seen in the above graphs during the 1980s even though CBI was not common across countries, there was a negative relationship between CBI and inflation level. This means that the greater the level of independence of a central bank, the lower the level of inflation within the particular country. It is thus obvious that the correlation between CBI and inflation is negative, whereas the errors overall are not fitted closely on the regression line. We should note however that the decade of 1980s was before central banks especially those within industrialized countries underwent major reforms in their statutes which then allowed them a greater degree of autonomy. During the 1990s as Siklos, P. (2002) explains, most central banks went through a reform, as there was a trend towards CBI. As a result the overall degree of CBI increased and all index values were revised upwards, the government granting more autonomy to central banks, in the belief that greater independence would just be adequate for lowering the level of inflation. However, the relationship between CBI and inflation during the 1990s turned out to be the reverse of that of the previous decade. That is, the correlation between CBI-inflation now became weaker but positive since the regression line on the scatter gram in figure 3b has an upward slope, meaning that inflation increases with the degree of independence. It is hard to explain what was wrong with the findings of the 1990s that caused the correlation to be positive, however one might argue that CBI increased for all countries during the 1990s and so it also reflects the inflation performance of the previous decade, although the more independent central banks have delivered lower inflation levels in the 1980s. Furthermore, the Cukierman Index used is believed to contain some inaccuracies concerning the measurements of the degree on independence and thereafter the relationship of that with inflation because it was extended from the 1980s towards the 1990s in a different way than the one initially specified. For this reason more tests will be carried out to explain and compare the effectiveness of measuring CBI using the Cukierman Index in contrast to other indices developed for the same purpose, for instance Alesina and Summers Index. The Cukierman Index will also be used to test the effect of CBI on inflation in transition economies, based on Ilieva and Gregoriou (2005) paper regarding inflation performance, i.e. average inflation and inflation variance, and CBI in transition economies during the period 1991-2003. 3.2 The determinants of the CBI index The degree of independence varies across countries. This is not only due to factors such as the type of independence of each bank, although the most common is operational independence, the degree of law compliance in each country, and tradition, but some other systematic factors as well. Such factors are described and categorized by Cukierman, who presents some hypotheses on these factors: Hypotheses about the determinants of CBI Initially, it is widely accepted that any form of inflationary bias raises the independence of central banks to the degree that politicians wish to grant to the CB. The main idea behind this concept is that the benefits of delegating monetary policy to an independent central bank will be higher when inflation bias is higher in instances of e.g. employment reaction to inflation shocks. This delegation according to Cukierman helps in preventing the competing political party from taking on activities not favoured by the government. Secondly, Cukierman et al (1992, 2001) make the hypothesis that: the wider are the financial markets and the more elastic the supply of funds to government with respect to the interest rate, the more likely is the CB to be independent. (2001; 19). Additionally, Maxfield (1995) supports that political authorities favour CBI where there is need for funds. When this need is high as he explains, the government delegates more authority to the central bank in order to signal the nations creditworthiness. Finally, the cases of countries that have experienced extremely high levels of inflation in the past, like Germany, Austria, and Brazil, show that such countries are more likely to delegate independence to a central bank so that politicians do not interfere with monetary policy. 3.3 The measurement of the CBI Index Due to the widespread concept that the degree of independence of a nations central bank plays a crucial role upon the policy actions and inflation, Cukierman (1992) presents an analysis of the effects of CBI on inflation and provides various indicators of CBI. However, as he explains, the degree of CBI is determined by several factors from legal to cultural some of which are difficult to measure and quantify, therefore the impact of CBI on inflation varies among countries and there is a certain degree of uncertainty about the level of CBI. As a result, the measurement and the creation of an index of CBI have been based on legal independence, as the degree of CBI also depends on the degree of independence granted to the bank by the law. Despite the variations in the degree of CBI, it can be deduced that a low degree of CBI is linked with higher levels of inflation and inflation variability, while the level of credibility of a central bank with a low degree of CBI will be lower. Cukierman presents three different sets of indicators of CBI; a proxy for legal independence and proxies for the deviations of actual from legal independence. Independence measured under these proxies is limited specifically to the Central banks ability to meet a single objective; price stability. The reason for using several proxies in measuring CBI is because each proxy is a noisy indicator that captures a somewhat different aspect of CB independence (Cukierman, 1992; 370), so using a combination of them reduces this noisiness of the overall measure 3.3.1 Measuring and Coding Legal Central Bank Independence Using a proxy of legal independence is vital in making comparisons with previous studies on the impact of CBI on economic issues because all existing attempts on the features of an independent central bank rely on the banks legal independence. Cukierman presents the indices of legal aspects of CBI by separating into four groups the variables which make for a legally independent central bank. These groups are: Chief executive officer: CEO Policy formulation: PF Final Objectives: OBJ Limitations on lending: LLand codes them by the degree of independence of each group for the central bank of each of the countries included in the study. The main assumptions made are; the central banks whose single objective is price stability are considered to be more independent, so are central banks with stricter limitations on lending from the CB. The coding involves sixteen different variables in a scale from 0 (least independence) to 1 (maximum independence), during the time period 1950-1989, separated into four different decades. Due to the narrow definition of each of the variables used and the consequent lack of precision and multicollinearity problems that may arise, these variables are aggregated into eight legal variables by just calculating the unweighted mean of the codings used. Furthermore, it is necessary to have an additional single index of legal independence for each country to assess the aggregate legal independence of the CB. This index can have two alternatives, the LVAU and the LVAW, that are computed by calculating the average of the codings of the first eight variables as described above. Table 1 in Appendix A shows the ranking of the countries according to the legal independence of their central banks as measured by the LVAU during the eighties decade. The LVAW would also give a similar picture. Looking at the table of results one can see that among the seven most highly-ranked countries four are developed (Switzerland, West Germany, Austria and U.S.), while among the seven least-ranked countries four are less developed (Morocco, Panama, Yugoslavia and Poland). Generally, the top 10% of the rankings is comprised of developed countries, whereas the bottom 10% is concentrated with less developed countries. One should also note that there had been no hyperinflation experienced by developed countries during the 1980s, while some of the Latin America countries have, e.g. Brazil and Bolivia with a rate of 230%. This according to Cukierman may suggest that legal CBI may be neither necessary nor sufficient for low inflation. (1992; 382). 3.3.2 The turnover rate of Central Bank governors as a proxy for actual independence As already explained, the legal status of the central bank is just one of the several determinants of actual CBI. There is no clear systematic indicator of actual CBI, but Cukierman (1992) presents two sets of such indicators. One is based on the actual turnover rate of the central banks governor, and the other is based on the answers given to a questionnaire on CBI. Table 2 in Appendix B shows the CB governors turnover rates for the period 1980-1989. It is assumed that the lower the turnover rate the higher the degree of actual independence. Although the results are chronologically old, it is obvious that turnover rates in less developed countries occupy a range that has never been experienced by developed countries. It is indicative that more than half of the less developed countries have a turnover rate higher than the maximum of the rate of developed countries. It is clear that less developed countries experience higher inflation rates, on the grounds of lower actual CBI. On the other hand, low turnover does not necessarily imply a high level of CB independence on the grounds that a relatively subservient governor will tend to stay in office longer than a governor who stands up to the executive branch. (Cukierman, 1992; 385) Critically assessing the results, since the maximum turnover rate for developed countries is 0.2 (.e. five years) suggests that the turnover proxy may not be effective proxies for actual CBI for the sample of developed countries, whereas this proxy can be considered indicative for the sample of developing countries since these have turnover rates exceeding 0.2. 3.3.3 Central Bank Independence from answers to a questionnaire Another aspect of characterizing CBI is the questionnaire. Under this method, answers were obtained from qualified central bankers from twenty-four countries during the period 1980-1989. The main questions asked covered the issues of; legal independence, final monetary policy objectives, monetary policy instruments, actual independence and its divergence from the law and intermediate targets and their indicators. In coding the variables of the questionnaire, the bank is assumed to be more independent, all other things being equal, if the following hold; the term of office of the CB governor is longer than that of the government, limitations exist on lending from the CB which the government is in no position of altering, and in cases where stock targets exist because these mean that the CB is more free to meet its price stability target. Table 3 in Appendix C shows the ranking of central banks by aggregate indices of independence according to questionnaire responses. The aggregate indices of QVAU and QVAW reflect the law and the way it is implemented in practice respectively, as well as important information about actual independence, and are very similar (à ?=0.99). The rankings agree to earlier studies that central banks of developed countries are more independent. However, the median of QVAU for developed countries, that is 0.6 for Britain and Lebanon, is greater than the median for less developed countries, that is 0.49 for Uruguay, and this contradicts the above findings for legal independence using the LVAU. When measuring the degree of CBI it should be taken into account that the measures used above fail to quantify all the aspects of CBI as some are difficult to quantify. Such aspects are the quality of the banks research department and its standing in comparison to other economic research institutions within the public sector (Cukierman, 1992). Independence is generally higher in countries with highly-developed financial markets according to Cukierman because the supervision of financial institutions is under the authority of the CB, so the larger the market the more wide the span of the CBs authority. 4. Central Bank Independence and Inflation Targeting In this section the impact of central bank independence on inflation, inflation variability and the economy overall is analyzed using a model to test whether CBI can actually lower inflation, and comparing the effects of CBI by using both the Cukierman and the Alesina indices of CBI. Additionally, the costs of achieving lower inflation through central bank independence are also explained. MacCallum, B. (1995) believes that it is strong will that is necessary for proper policy behaviour by central banks, not rules and regulations. A policy maker, i.e. a central banker in this case should act immediately to an inflation shock to restore the problem without letting any sp Effects of Central Bank Independence on Inflation Rates Effects of Central Bank Independence on Inflation Rates Abstract This paper analyses and explains the effects of central bank independence on a countrys inflation rates and its economic performance thereafter. It deals with the benefits believed to come along with independence and the delegation of monetary policy to the central bank, the determinants and accuracy of the index of central bank independence (CBI), and the different impact that CBI has on developed and developing countries. The studies and test conducted have shown that CBI lowers inflation in developed countries but in developing countries it might have the reverse effects, mainly due to the degree of independence, and factors like traditions, the law, and the statue of the economy which vary across countries. 1. Introduction This paper intends to study the relationship between central bank independence (CBI) and inflation levels among different countries; developing and industrialized. The main research problem that I intend to examine is whether central bank independence can lower the inflation rates of the countries that grant independence to their central banks, and whether this can lead to improved economic performance. What is discussed in this paper is not only whether central bank independence (CBI) can lower inflation and hence inflation variability, but also whether this can be achieved at low cost. The economies presented in the study include both those of the developed countries, e.g. the U.K., as well as those in transition e.g. Russia that have recently gained entrance in the EU. In this paper I analyze the impact of CBI on inflation, the benefits that are believed to come along with CBI and the factors used in measuring CBI. You will see that CBI can have different forms of measurement that produce slightly different results, hence the effectiveness of the CBI index is also analyzed. The reason for choosing this topic for further study is simply because during the past two decades there has been a considerable move towards central bank independence across several countries, with the belief that this will improve their inflation levels and thus contribute to economic growth. However, as you will see further on, this is not always the case, as some studies have revealed contradicting results, and economists and academics continue their studies to get a clerer picture of this issue. 2. The Spread of CBI and The Reasons for It To begin with, it is amazing how fast CBI has spread among countries and governments since the late 1980s. One simple explanation of this spread is A.Alesinas (1988; 845) statement: independent central banks have been associated with a lower average inflation rate and may have been responsible for reducing politically induced volatility of monetary policy and inflation 2.1 Should a central bank become independent? Folder (2005) explains that CBI was adopted to avoid possible disputes between political parties as a central bank is seen as a provider of information. Many economists have expressed their opinion on the spread of CBI; others have linked it to a way of avoiding the blame of political failure by some governmental parties (Miller, G. 1998, White 1994). Others have linked it to the infrequent changes of the government (de Haan and vant Hag, 1995). That is, central bank independence in many cases was adopted after periods of high inflation in order to reduce it, due to the inflation targeting function a central bank is capable of pursuing. It can also be associated with the attraction of foreign investment and hence economic growth as a consequence of the targets set and the autonomy with which the bank can then operate (Maxfield, 1997). In countries within the European Union, CBI is a perquisite following the Maastricht Treaty (1992) for adopting the euro currency. Overall and according to Folder (2005), independence has always been related to the adoption of anti-inflationary measures for pursuing monetary policy, but its explanation lies within the sociology of the financial elites and the politics legitimizing their policy preferences. The reasons behind achieving price stability through gaining central bank independence, Cukierman (1996) explains are several and include; the breakdown of other institutions like the European Monetary System (EMS) that had been responsible for maintaining price stability which is considered as the single and most significant objective of a central bank. Ilieva and Gregoriou (2005) suggest that in transition economies central bank independence has increased mainly due to the desire of such countries like e.g. Czech Republic, Poland, Romania, etc., to join the European Union and the acquis communautaire that applicant countries should adopt. As they continue to reason the addiction to CBI, they add that another incentive for CBI is the international financial institutions such as the IMF (International Monetary Fund) that require certain criteria to be met before making unconditional loans, and these criteria are feasibly met with the help of CBI. Also, countries are attracted to CBI as this will attract potential investors by improving the nations creditworthiness. Cukierman, A. (1996) analyses developments since the late 1980s to the legal independence of central banks and to its meaning; the measurement of CBI, the interaction of central banks with the government, its effect on the economy, its determinants, etc According to Cukierman, the trend towards CBI is due to a quest for price stability which is due to the following two reasons: First, following the stagflation of the seventies and the adverse economic performance of some high inflation countries, in Latin America and elsewhere, conventional wisdom concerning inflation and real growth has changed. Whereas during the sixties the accepted view was in line with Keynesian dogma, that some inflation is good for growth, during the eighties and nineties became that inflation and the associate uncertainties retard growth. (1996; 3) The good economic performance of Japan and Germany, countries with already low inflation added more value to the above concept. Second, the rapid growth and internationalization of capital markets raised the importance of price stability as governments and private investors sought to enhance their access to broadening world financial markets. (1996; 3) 2.2 Types of Central Bank Independence Independence with regards to central banking can be categorized into different groups, depending on the degree of freedom and the subject from which the central bank becomes independent. The major types of independence are; Legal independence, where the bank is partly accountable to the government and legislation provides a framework within which the central bank and the government cooperate on certain issues. This form of independence varies significantly among countries as it depends on how strong in the law in each country and the degree to which it is followed. However, the degree of legal independence, namely LVAW, as it will be shown below, has been used by many as a major index of measuring the degree of CBI. Goal independence refers to the case where the central bank is allowed to set its own goals, e.g. price stability, money supply, inflation targeting. However in most cases under this type of independence, the bank will decide on its goals with the confirmation of the relevant governmental departments. In this way, goal independence helps avoiding conflicts among fiscal and monetary policies, and increases the level of transparency and credibility of the central bank over its goals. Operational independence is the most common form of independence and is followed by many central banks around the world, for instance, the Bank of England since 1997. It involves the government setting the banks goals e.g. a 2% level of inflation, but the central bank being free to choose the instruments e.g. interest rates, to meet the targets set by the government. Another form of independence is managerial independence, by which the central bank has the power of appointing its own stuff, set its budget, etc. This form is a necessity for the existence of the other abovementioned forms of central bank independence and is therefore granted to all central banks that can call themselves independent. 2.3 The case for central bank independence There is a huge surge towards central bank independence by both the public and the governments, in the belief that independent central banks will not only achieve low inflation rates and price stability, but will subsequently lead to long-term economic growth and development. However CBI is an issue that needs further research before determining whether it should be adopted by all countries. This depends on the economic state of the country, whether it is a developed or a developing country or even on the demand of autonomy by the political parties within the country since by granting independence the government must pass to the bank the responsibilities of e.g. controlling the interest rates, etc. over which it used to have the power. Another issue that needs to be examined before granting independence to a central bank is the political stability and the degree of uncertainty within the country. This is because in times of uncertainty and instabilities, e.g. prior to elections, the public favours CBI as an independent central bank is more objective in its role and always forward looking without ignoring the long-term effects of its decisions. The majority of the parties affected by the actions of an independent central bank, i.e. the government as well as the general public are attracted by CBI because of the greater accountability and transparency the bank is equipped with when adopting a greater degree of autonomy. Moreover, it is expected to bring lower levels of inflation and this is the main reason why people welcome CBI and the number of central banks becoming independent has been increasing over the years. The main reason behind this expectation is because a central bank generally acts in favor of the public and in addition to the fact that it becomes free from the government and any political pressures, it is in a position to avoid short-term temptations regarding low interest rates which the government usually uses prior to electoral periods, for the sake of long-term low inflation and price stability, which in combination with other exogenous factors can result in economic growth. Moreover, when a central bank gains its independence through institutional reform it becomes capable of appointing its own governor thus it moves away from political interference, and can also set an explicit inflation target. Additionally and as Carlstrom, T.C. and Fuerst, S.T. (2006) explain independence helps a central bank in constraining the behavior of fiscal authorities. That is, it can prevent people and especially the government following fiscal policy from acting in their short-term best interests, recognizing that any actions taken in the short-term e.g. lowering the interest rates to attract investments, may become undesirable in the long-term, e.g. rising inflation levels as with higher demand from low interest rates, the prices will likely increase. In this way, CBI also prevents the fiscal authorities from inflating the short-term for delivering e.g. favorable exchange rates. Hence, monetary policy can run in a more credible way and following the targets set, markets w ill know what to expect thus shocks will be limited. However an independent central bank is also likely in extreme cases to bring so low levels of inflation that can be harmful to the economy. According to Epstein, G. (2007), the 3.5% drop in inflation levels by countries adopting an inflation-targeting monetary policy (IMF, 2006) is questionable as to whether this decline will improve economic growth. Explicitly, if the inflation level of a country is already low and the central bank adopts an inflation-targeting monetary policy then the resulting lower inflation level might prove dangerous to the economy by generating economic cycles. Cukierman (1996) has developed two separate approaches for reasoning the urge towards central bank independence and explaining the benefits that can be enjoyed from independence. These include; the theoretical approach according to which in the short-run monetary policy can be conducted in such a way that it allows for some inflation so that it can achieve employment, high economic activity and low interest rates. Hence, policy makers can expect some degree of inflation which they will present in the form of nominal wage and capital market contracts. In this way however, policy makers will have to keep inflation at a level that would balance the real equilibrium if they had been committed to zero-inflation. As a result of this discretionary use of monetary policy, this is subject to inflationary bias, and this bias can only be minimised if monetary policy is delegated to an independent central bank because only this institution is free to choose how to operate monetary policy and takes interest mostly if not only to price stability. And the empirical approach by which the case of CBI lies on empirical evidence showing that countries with an independent central bank have lower inflation rates and higher growth rates per capita output. An example of such a country is New Zealand: 2.3.1 The case of New Zealand New Zealand is a country whose central bank managed to drop the inflation level after being granted with greater independence. The Reserve Bank of New Zealand was granted independence in 1989 following the Reserve Bank of New Zealand Act of 1989 and had therefore established an explicit inflation target. The result was to reduce inflation levels from 7.6% during the years 1955-1988 from when the reserve bank was not independent, down to just 2.7%, after becoming independent, during the period 1989-2000. The latter rate is now considered one of the lowest among industrialized countries. It is obvious that among all OPEC countries, the central bank of New Zealand managed to achieve the lowest inflation rate, especially during the 1990s. What happened during the period of the inflation reduction was that the reserve bank of New Zealand went through a reform that resulted in it being granted with independence and a greater degree of autonomy, leading to low inflation. Specifically, prior to 1989 it used to be an arm of the government. Monetary policy used to be subject to the ministry of finance and therefore the government. As a result, the level of independence was one of the lowest among industrialized countries, while the level of inflation was of the highest. Even then, the relationship between central bank independence was negative, even though the results were the reverse of what is considered optimum, i.e. greater independence, lower inflation. In 1989, the Reserve Bank of New Zealand Act was passed by law. This act codifies inflation targeting and gives more autonomy to the countrys central bank in order to meet its objectives. According to the Act the central banks primary function is: to formulate and implement monetary policy directed to the economic objective of achieving and maintaining stability in the general level of prices. (Reserve Bank of New Zealand Act, 1989 as quoted in Carlstrom T.C. and Fuerst, S.T., 2006, p.3). The impact of the Act on New Zealands economy and specifically the Reserve Banks autonomy can be seen in figure 2 below, which compares the degree of independence across different time periods and among different countries. The findings of the New Zealand case show that if the country had adopted independence earlier then its average inflation rate would be 3.4% rather than 7.6% that it actually used to be, assuming all other things being equal. Following this assumption, CBI itself would be sufficient to reduce worldwide inflation levels from 5.6% down to 3.8%. Despite the considerable drop in New Zealands inflation rate it is still questionable whether this drop was caused solely by CBI, and it is difficult, if not impossible, to quantify by how much the inflation reduction was due to CBI. Firm conclusions cannot be made yet since the data used in this case is of limited sample size and comparisons would therefore be insufficient. What is true is that the relationship between CBI and inflation is similar across time. Any changes to the strength of this relationship are mostly due to macroeconomic and other factors such as the state of the economy, the state of the government, e.g. democracy, etc. and others that will be explained later in this paper. 3. Measuring Central Bank Independence The degree of CBI for each central bank varies according to the state of each country and to compliance with the law. As Cukierman explains, in developing countries where compliance with the law is poor, a suitable proxy for CBI would be the turnover of central bank governors, whereas in industrialised countries such a proxy would be legal independence. Generally, when the appropriate index of independence is used, the results indicate an inverse relationship between CBI and inflation. However, care should be taken not to mistake legal independence with actual independence, as legal independence is necessary but does not guarantee actual independence; legal independence is a necessary, but not a sufficient condition for a truly independent CB. (Cukierman, A., 2001; 7). Exceptions exist, like developed countries, where legal independence seems to be a good proxy because law is highly complied. For a clearer picture of the effectiveness of CBI on the economy, it is preferred that some variables that make up the CBI index are used in combination, or that some indices are used only for a specific purpose. For instance, legal independence is a good proxy for actual independence in developed countries rather than in developing ones. 3.1 The Cukierman Index of CBI The method that will be used the most in this paper to measure the degree of central bank independence and its relationship with inflation will be Cukierman Index (1992), the most widely accepted and used index for this purpose. Initially, the exact definition of the Cukierman Index according to Siklos, P. (1992; 65) is: An indicator of the degree of autonomy enjoyed by several central banks. Cukierman Index to demonstrate graphically the measures of CBI and inflation during two different decades, namely the 1980s and the 1990s: As can be seen in the above graphs during the 1980s even though CBI was not common across countries, there was a negative relationship between CBI and inflation level. This means that the greater the level of independence of a central bank, the lower the level of inflation within the particular country. It is thus obvious that the correlation between CBI and inflation is negative, whereas the errors overall are not fitted closely on the regression line. We should note however that the decade of 1980s was before central banks especially those within industrialized countries underwent major reforms in their statutes which then allowed them a greater degree of autonomy. During the 1990s as Siklos, P. (2002) explains, most central banks went through a reform, as there was a trend towards CBI. As a result the overall degree of CBI increased and all index values were revised upwards, the government granting more autonomy to central banks, in the belief that greater independence would just be adequate for lowering the level of inflation. However, the relationship between CBI and inflation during the 1990s turned out to be the reverse of that of the previous decade. That is, the correlation between CBI-inflation now became weaker but positive since the regression line on the scatter gram in figure 3b has an upward slope, meaning that inflation increases with the degree of independence. It is hard to explain what was wrong with the findings of the 1990s that caused the correlation to be positive, however one might argue that CBI increased for all countries during the 1990s and so it also reflects the inflation performance of the previous decade, although the more independent central banks have delivered lower inflation levels in the 1980s. Furthermore, the Cukierman Index used is believed to contain some inaccuracies concerning the measurements of the degree on independence and thereafter the relationship of that with inflation because it was extended from the 1980s towards the 1990s in a different way than the one initially specified. For this reason more tests will be carried out to explain and compare the effectiveness of measuring CBI using the Cukierman Index in contrast to other indices developed for the same purpose, for instance Alesina and Summers Index. The Cukierman Index will also be used to test the effect of CBI on inflation in transition economies, based on Ilieva and Gregoriou (2005) paper regarding inflation performance, i.e. average inflation and inflation variance, and CBI in transition economies during the period 1991-2003. 3.2 The determinants of the CBI index The degree of independence varies across countries. This is not only due to factors such as the type of independence of each bank, although the most common is operational independence, the degree of law compliance in each country, and tradition, but some other systematic factors as well. Such factors are described and categorized by Cukierman, who presents some hypotheses on these factors: Hypotheses about the determinants of CBI Initially, it is widely accepted that any form of inflationary bias raises the independence of central banks to the degree that politicians wish to grant to the CB. The main idea behind this concept is that the benefits of delegating monetary policy to an independent central bank will be higher when inflation bias is higher in instances of e.g. employment reaction to inflation shocks. This delegation according to Cukierman helps in preventing the competing political party from taking on activities not favoured by the government. Secondly, Cukierman et al (1992, 2001) make the hypothesis that: the wider are the financial markets and the more elastic the supply of funds to government with respect to the interest rate, the more likely is the CB to be independent. (2001; 19). Additionally, Maxfield (1995) supports that political authorities favour CBI where there is need for funds. When this need is high as he explains, the government delegates more authority to the central bank in order to signal the nations creditworthiness. Finally, the cases of countries that have experienced extremely high levels of inflation in the past, like Germany, Austria, and Brazil, show that such countries are more likely to delegate independence to a central bank so that politicians do not interfere with monetary policy. 3.3 The measurement of the CBI Index Due to the widespread concept that the degree of independence of a nations central bank plays a crucial role upon the policy actions and inflation, Cukierman (1992) presents an analysis of the effects of CBI on inflation and provides various indicators of CBI. However, as he explains, the degree of CBI is determined by several factors from legal to cultural some of which are difficult to measure and quantify, therefore the impact of CBI on inflation varies among countries and there is a certain degree of uncertainty about the level of CBI. As a result, the measurement and the creation of an index of CBI have been based on legal independence, as the degree of CBI also depends on the degree of independence granted to the bank by the law. Despite the variations in the degree of CBI, it can be deduced that a low degree of CBI is linked with higher levels of inflation and inflation variability, while the level of credibility of a central bank with a low degree of CBI will be lower. Cukierman presents three different sets of indicators of CBI; a proxy for legal independence and proxies for the deviations of actual from legal independence. Independence measured under these proxies is limited specifically to the Central banks ability to meet a single objective; price stability. The reason for using several proxies in measuring CBI is because each proxy is a noisy indicator that captures a somewhat different aspect of CB independence (Cukierman, 1992; 370), so using a combination of them reduces this noisiness of the overall measure 3.3.1 Measuring and Coding Legal Central Bank Independence Using a proxy of legal independence is vital in making comparisons with previous studies on the impact of CBI on economic issues because all existing attempts on the features of an independent central bank rely on the banks legal independence. Cukierman presents the indices of legal aspects of CBI by separating into four groups the variables which make for a legally independent central bank. These groups are: Chief executive officer: CEO Policy formulation: PF Final Objectives: OBJ Limitations on lending: LLand codes them by the degree of independence of each group for the central bank of each of the countries included in the study. The main assumptions made are; the central banks whose single objective is price stability are considered to be more independent, so are central banks with stricter limitations on lending from the CB. The coding involves sixteen different variables in a scale from 0 (least independence) to 1 (maximum independence), during the time period 1950-1989, separated into four different decades. Due to the narrow definition of each of the variables used and the consequent lack of precision and multicollinearity problems that may arise, these variables are aggregated into eight legal variables by just calculating the unweighted mean of the codings used. Furthermore, it is necessary to have an additional single index of legal independence for each country to assess the aggregate legal independence of the CB. This index can have two alternatives, the LVAU and the LVAW, that are computed by calculating the average of the codings of the first eight variables as described above. Table 1 in Appendix A shows the ranking of the countries according to the legal independence of their central banks as measured by the LVAU during the eighties decade. The LVAW would also give a similar picture. Looking at the table of results one can see that among the seven most highly-ranked countries four are developed (Switzerland, West Germany, Austria and U.S.), while among the seven least-ranked countries four are less developed (Morocco, Panama, Yugoslavia and Poland). Generally, the top 10% of the rankings is comprised of developed countries, whereas the bottom 10% is concentrated with less developed countries. One should also note that there had been no hyperinflation experienced by developed countries during the 1980s, while some of the Latin America countries have, e.g. Brazil and Bolivia with a rate of 230%. This according to Cukierman may suggest that legal CBI may be neither necessary nor sufficient for low inflation. (1992; 382). 3.3.2 The turnover rate of Central Bank governors as a proxy for actual independence As already explained, the legal status of the central bank is just one of the several determinants of actual CBI. There is no clear systematic indicator of actual CBI, but Cukierman (1992) presents two sets of such indicators. One is based on the actual turnover rate of the central banks governor, and the other is based on the answers given to a questionnaire on CBI. Table 2 in Appendix B shows the CB governors turnover rates for the period 1980-1989. It is assumed that the lower the turnover rate the higher the degree of actual independence. Although the results are chronologically old, it is obvious that turnover rates in less developed countries occupy a range that has never been experienced by developed countries. It is indicative that more than half of the less developed countries have a turnover rate higher than the maximum of the rate of developed countries. It is clear that less developed countries experience higher inflation rates, on the grounds of lower actual CBI. On the other hand, low turnover does not necessarily imply a high level of CB independence on the grounds that a relatively subservient governor will tend to stay in office longer than a governor who stands up to the executive branch. (Cukierman, 1992; 385) Critically assessing the results, since the maximum turnover rate for developed countries is 0.2 (.e. five years) suggests that the turnover proxy may not be effective proxies for actual CBI for the sample of developed countries, whereas this proxy can be considered indicative for the sample of developing countries since these have turnover rates exceeding 0.2. 3.3.3 Central Bank Independence from answers to a questionnaire Another aspect of characterizing CBI is the questionnaire. Under this method, answers were obtained from qualified central bankers from twenty-four countries during the period 1980-1989. The main questions asked covered the issues of; legal independence, final monetary policy objectives, monetary policy instruments, actual independence and its divergence from the law and intermediate targets and their indicators. In coding the variables of the questionnaire, the bank is assumed to be more independent, all other things being equal, if the following hold; the term of office of the CB governor is longer than that of the government, limitations exist on lending from the CB which the government is in no position of altering, and in cases where stock targets exist because these mean that the CB is more free to meet its price stability target. Table 3 in Appendix C shows the ranking of central banks by aggregate indices of independence according to questionnaire responses. The aggregate indices of QVAU and QVAW reflect the law and the way it is implemented in practice respectively, as well as important information about actual independence, and are very similar (à ?=0.99). The rankings agree to earlier studies that central banks of developed countries are more independent. However, the median of QVAU for developed countries, that is 0.6 for Britain and Lebanon, is greater than the median for less developed countries, that is 0.49 for Uruguay, and this contradicts the above findings for legal independence using the LVAU. When measuring the degree of CBI it should be taken into account that the measures used above fail to quantify all the aspects of CBI as some are difficult to quantify. Such aspects are the quality of the banks research department and its standing in comparison to other economic research institutions within the public sector (Cukierman, 1992). Independence is generally higher in countries with highly-developed financial markets according to Cukierman because the supervision of financial institutions is under the authority of the CB, so the larger the market the more wide the span of the CBs authority. 4. Central Bank Independence and Inflation Targeting In this section the impact of central bank independence on inflation, inflation variability and the economy overall is analyzed using a model to test whether CBI can actually lower inflation, and comparing the effects of CBI by using both the Cukierman and the Alesina indices of CBI. Additionally, the costs of achieving lower inflation through central bank independence are also explained. MacCallum, B. (1995) believes that it is strong will that is necessary for proper policy behaviour by central banks, not rules and regulations. A policy maker, i.e. a central banker in this case should act immediately to an inflation shock to restore the problem without letting any sp