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

Homeschooling: Academics, Socialization and College Admissions Prospect

Homeschooling: Academics, Socialization and College Admissions Prospects Homeschooling is probably one of the least known and least understood issues in education. Many people tend to think that most homeschoolers are religious conservatives or extremists. However, the truth is that people from all walks of life are joining the homeschooling bandwagon (Ray, 2004). The main misconception is that homeschooled children don’t get the same academic and social education as traditionally schooled children. Contrary to popular perception, homeschooled children have the same, if not better academic opportunities, social opportunities and college admissions prospects than traditionally schooled students have. According to Mary Griffith, author of the book The Homeschooling Handbook, the concept of homeschooling is nothing new to society. It is only in the past 150 years that public school system as we know it came into effect (Griffith, 1999). Prior to that, â€Å"†¦the family was the basis for social life†¦the home was where children learned what was necessary to function in their community† (1999). By the mid-1970s, there were barely any people practicing homeschooling (Ray, 2004). However, over the past twenty years there has been a resurgence in people choosing homeschooling (2004). There has been a 500 percent increase in homeschooling from the 1990-1991 school year to the 2002-2003 school year (2004). The National Home Education Research Institute (NHERI) estimates â€Å"that between 1.7 and 2.1 million students were being homeschooled in the U.S., in every grade level from kindergarten through twelfth grade†¦Indications are that the growth rate is between 7 percent and 15 percent per year † (2004). People choose to homeschool for a var... ...s and traditional school graduates. Journal of College Admission, Spring 2004, p17. Klicka, Chris (2002) Socialization: homeschoolers are in the real world. Issue Analysis, Home School Legal Defense Association. Retrieved April 10, 2005 from www.hslda.org. Kochenderfer R, & Kanna E. (2002). Homeschooling for success: How parents can create a superior education for their child. New York NY: Warner Books. Ray, Brian D. Ph.D (2004). Worldwide guide to homeschooling: Facts and stats on the benefits of home school. Nashville TN: Broadman & Holman Publishers. Saba L., & Gattis J. (2002). The McGraw-Hill homeschooling companion. New York NY: McGraw-Hill Publishers. Zehr, Mary Ann. (2003). Home school students adjust to new homes on college campuses. Education Week, Vol. 23, Issue 2, p6. Retrieved April 22, 2005 from Academic Search Premier database.

Country Lovers: a Reader’s Response

Country Lovers, Nadine Gordimer TLC 25 November 2012 ? Nadine Gordimer dramatically depicts the theme of forbidden love in Country Lovers, but more than just the depth of this love, the forbidden relationship between races during the years of apartheid. Gordimer brings forward very early the fact of racial division, â€Å"the black children are making along with the bodily changes common to all, an easy transition to adult forms of address, beginning to call their old playmates missus and baasie little master†. Gordimer, 1975) This short story powerfully demonstrates the ever present desire for that which is taboo and the often very tragic end for all concerned in an overtly subjugated society, race notwithstanding. She sets the story in South Africa on the farm owned by the white Eysendeck Family, early in the childhood of their son Paalus and the young black girl, Thebedi.The vivid descriptions or Local Color are depictions of culture and landscape within this setting allow the author to depict the atmosphere that shaped the characters moral values of individuals in a particular region. (Clugston, 6. 4) The use of setting, in this case the time and place of the story also illustrates Milhauser’s opinion, â€Å"†¦ if you concentrate your attention on some apparently insignificant portion of the world, you will find, deep within it, nothing less than the world itself.The author also cleverly uses foreshadowing to allude to issues the characters may deal with, â€Å"The trouble was Paalus Eysendeck did not seem to realize Thebdi was now simply one of the crowd of farm children down at the kraal†. (Gordimer, 1975) The overwhelming sense of cultural taboo was evident throughout the story and was recognized by both characters in their need to be secretive in their meetings. The use of foreshadowing and setting strongly supported the themes in the story, allowing Gordimer to bring the reader closer to the heart to the story.Although Nadine Gordimer grew up in South Africa during the enforcement of apartheid and attempted throughout her years of writing to bring attention to the under privileged; she and many other writers did not have the ability or desire to discuss the unfortunate issues that generations of the often over-indulged and morally corrupt class also had to face, â€Å"I will try and carry on as best I can to hold my head up in the district. † (Gordimer, 1975) The characters throughout this story were strong and richly developed.Both Paalus and Thebedi were similarly portrayed as equally developing young people in the illustrations of their interactions with classmates and friends, an example being the gifts they exchanged on holidays and the joy they gained admiration of them. (Gordimer) Ms. Gordimer expertly executed the account of two young people that were lifelong friends and eventually secret lovers and the on pressures that society, class and race can have on those individuals.An incredible sense of despair is exposed in the passages discussing the issues faced by the characters, Thebedi and Paalus, both showed a feeling of loss of control of the situation when he stated, â€Å"I feel like killing myself†; she could not help but feel sadness for a man she likely still loved, â€Å"her eyes began to glow, to thicken with tears†. (Gordimer, 1975) This effort to bring the ominous mood to the reader is astonishingly effective. In the last portion of the story the dialogue of the main characters demonstrates the deliberate change in the characters.Paalus becomes very aware of the potentially catastrophic outcome of his and Thebedi’s indulgences. The shift in characterization was brilliantly executed with the seemingly formidable white man becoming the pariah in the district where his family was well respected. The conflict or struggle within both characters became what to do with the baby who was the product of forbidden love in an unaccepting society. Lastly, the reader is made aware of several shifts that have shift occurred. The first shift being for Paalus and the Eysendeck family by being lowered in status â€Å" left with his mother’s raincoat shielding his face from photographers†.The next obvious shift of the Judge in his statement in court actually raised Njabolu’s status, †by commending the honorable behavior of the husband†¦ and even provided clothes for the unfortunate infant out of his slender means. † (Gordimer, 1975) The final line of the story provides insight on the outcome by bringing to light the fact that the girl â€Å"in her own language stated that â€Å"it was a thing of our childhood and they don’t see each other anymore’’ The symbolic nature of this last line demonstrated the eventual movement forward of the young woman and her embracing her life as it was set in motion by time and society to be. REFERENCES: Clugston, R. W. (2010). Journey into literature. San Diego, CA: Bridgepoint Education, Milhauser, S. (2008). The Ambition of the Short Story. The New York Times. Retrieved from: http://www. nytimes. com/2008/10/05/books/review/Millhauser-t. html

MASLOW’S THEORY OF HUMAN NEEDS Essay

MASLOW’S THEORY OF HUMAN NEEDS Maslow’s theory of human needs focuses on the key foundation and the relations of human needs A need is a physiological or psychological deficiency that a person wants to satisfy In his theory, Maslow identified human needs and categorized them into 5 levels. These levels are physiological needs, safety needs, social needs, esteem needs and self-actualization needs. It is Important for managers to know this theory because these needs cause tensions which can influence a person’s work attitude and behaviors Maslow’s theory is based on two underlying principles: Deficit principle which states that a satisfied need no longer motivates behavior because people act to satisfy deprived needs Progression principle that states that the five needs he identified exist in a hierarchy, which means that a need at any level can only be put into play after a lower-level need has been satisfied. Maslow identified five levels of human needs, starting from highest to lowest which are: Physiological needs: Physiological needs are basic human needs and biological necessities such food, water, shelter, air, sleep, etc. These needs are the strongest because the physiological needs come first in the person’s search for satisfaction. Ex: rest and refreshment breaks, physical comfort on the job, reasonable work hours Safety needs: Safety needs includes the need of security, protection, and stability in order to be free of the threat of physical and emotional harm. It is important to understand this need and for managers to provide a safe workplace. Ex: safe working conditions, job security, base compensation and benefits Social needs: Social needs are those related to interaction and belongingness with other people and include work groups, friends, family, love and affection, relationships, etc. People seek to overcome feelings of loneliness and alienation and managers must understand this to ensure  employee involvement, production and motivation. Ex: friendly coworkers, interaction with customers, pleasant supervisors Esteem needs: Esteem needs are when people desire self-esteem from both themselves and by others too. Esteem needs include achievement, mastery, respect, competence, prestige, recognition, managerial responsibility, etc. Managers who understand this can help ensure employees and team members feel valued and respected which increases their self-esteem. Ex: responsibility of an important job, promotion to higher status job, praise and recognition from the boss Self-actualization needs: Self-actualization is a person’s need to reach their full capability. It is the highest need because it develops only after all of the foregoing needs are satisfied and includes realizing personal potential, personal growth, self-fulfillment, and creativity. As a manager, it is important to help employees or team members find this, so their employees will be satisfied and productive. Ex: creative and challenging work, participation in decision making, job flexibility and autonomy

Free Essays on Frankenstein And His Use Of Science!

Victor Frankenstein and His Use of Science Every spring there is a plethora of new animate beings. Creation is a yearly event for most animals. There are countless children born each day. All living beings procreate. Victor Frankenstein was a scientist, and the goal of science is to discover new information, and Victor Frankenstein was simply being a scientist and creating new information. When Victor Frankenstein created his monster, it could be compared to genetic engineering or cloning of today. Scientists are trying to re- create life from another exact life form through cloning. They are trying to make the creation of life better and humans that are better quality, without disease or deformity through genetic engineering. Since the beginning of time humans have been obsessed with the idea of where life comes from, and how it is created. Charles Darwin originated the idea of evolution. Another theory that is used to explain the origin of life is the big bang theory that states that life was created from a cosmic explosion. Yet another theory on the origination of life is the existence of God and that God created the earth and all of the life on earth. Victor Frankenstein is exactly like the scientists of today. Victor Frankenstein is trying to make a human being from other, deceased human beings, this could be compared to cloning today, making one creature from another. The possibility, or theory of genetic engineering can guarantee that humans would be without deformity, affliction or frailty. Victor Frankenstein may not have chosen parts for his monster, or human that were necessarily beautiful, but Victor Frankenstein tried to make his product as earthborn as possible. Victor Frankenstein was simply doing the same thing that scientists have always been trying to do. Victor Franke... Free Essays on Frankenstein And His Use Of Science! Free Essays on Frankenstein And His Use Of Science! Victor Frankenstein and His Use of Science Every spring there is a plethora of new animate beings. Creation is a yearly event for most animals. There are countless children born each day. All living beings procreate. Victor Frankenstein was a scientist, and the goal of science is to discover new information, and Victor Frankenstein was simply being a scientist and creating new information. When Victor Frankenstein created his monster, it could be compared to genetic engineering or cloning of today. Scientists are trying to re- create life from another exact life form through cloning. They are trying to make the creation of life better and humans that are better quality, without disease or deformity through genetic engineering. Since the beginning of time humans have been obsessed with the idea of where life comes from, and how it is created. Charles Darwin originated the idea of evolution. Another theory that is used to explain the origin of life is the big bang theory that states that life was created from a cosmic explosion. Yet another theory on the origination of life is the existence of God and that God created the earth and all of the life on earth. Victor Frankenstein is exactly like the scientists of today. Victor Frankenstein is trying to make a human being from other, deceased human beings, this could be compared to cloning today, making one creature from another. The possibility, or theory of genetic engineering can guarantee that humans would be without deformity, affliction or frailty. Victor Frankenstein may not have chosen parts for his monster, or human that were necessarily beautiful, but Victor Frankenstein tried to make his product as earthborn as possible. Victor Frankenstein was simply doing the same thing that scientists have always been trying to do. Victor Franke...

Coney Island Essay Example | Topics and Well Written Essays - 750 words

Coney Island - Essay Example At the turning of the twentieth century, this culture was still in the first stage of formation and not fully incorporated within the society’s life (Kasson, 1978). Its fullest expression at this time lay in the main realm of commercial based amusements, which created essential symbols of the new cultural based order and helped to knit a complex cohesive audience. At the turn of the century, Coney Island was leading in establishment of symbols and their relationship to the new audiences. Some of the changes witnessed were governing of the Nineteenth-century America with some striking set of values and cultural aspects such as Victorian" compared to England Queen Victoria reigned. Interestingly, the urban-industrial society was facilitated with the genteel reformers who were eager to make a step in cultural leadership by disciplining, refining, and instructing the turbulent urban-industrial democracy within the people. The American apostles of culture put a lot of effort to ensure that they inculcate Victorian virtues of "character" such as self-control, moral integrity, industriousness, earnestness and soberness among the citizens. The American apostles believed that changing the culture of the urban-industrial society would help the men in passion to grow economically use leisure and work time efficiently. This was what the urban-based society required in order to grow economically, socially and culturally. Moreover, genteel culture occupying a position given that genteel reformers founded libraries, symphonies museums and other great institutions that help to set a cultural change that dominated public based discussion (Kasson, 1978). Of the critical importance to their success as cultural based arbiters was the ability to create a support of influential shapers of the great mass culture, who echoed their development tone and carried the message to audience. As a result, a series of technological based innovations were disseminated which

Critically Appraising the Business Case for Diversity Essay

Critically Appraising the Business Case for Diversity - Essay Example Managers should strive to fight off the fears that come with the policy of multiculturalism and should instead embrace the fact that the world is evolving and that no matter how diverse different communities are; we are all one and are united. Those managers who choose to go by the business case approach have no idea about the benefits that can be brought about by diversity. To enlightenment this point, diversity is discussed below. Managers are involved in many functions of an organization. These managerial functions are Controlling, Staffing, Planning, Directing and Organizing. With these functions, comes ethical responsibilities since the managers have to come up with clear expectations on how the employee should behave for the overall accountability, decision making and goal reaching in the organization. Consequently, organizations are impacted upon by laws and regulations of the area and country in which they are situated. Going against those laws leads to lawsuits and penalties . The linchpin to employee productivity according to a resent survey is employee engagement and ethical behaviour. These two aspects are built by the overall organizational culture. (Cummins, 1996) In general, managers deal with four main areas of an organization. These areas are employment, performance evaluation, restraint and termination of employment. These four areas influence the ethical issues in an organization because they deal with sincerity, justice and individual decorum. One of the major ethical issues that arise from the functions of a manager is diversity. (Pringle, 2006) Diversity means being different and unique in aspects that encompass race, customs, masculinity and femininity, sexuality, age, socio-economic status, physical abilities and inabilities, religion and political beliefs. It is an ethical issue because the manager ought to have the ability to look at these differences in a secure, optimistic and cultivating manner; being able to endure, embrace and commemorate the affluence in the diverse dimensions. They should also be in a position to help other employees embrace the concept of diversity. (Kirton, 2008) As a result of diversity, companies are faced with numerous issues and among them is the issue of harassment. The term harassment does not only mean sexual harassment. It is a broad term that encompasses all types of prejudice and behaviour considered as irksome, intimidating and distractive. It could be in the form of language, actions and menace and or negative remarks based on a person's diversity. (Cummins, 1996) Harassment can be of different categories not only sexual as most people would assume. However, sexual harassment is the most common type of harassment. Below are the types of harassment: Sexual Harassment, Race, Religion, National Origin harassment, Age harassment, Disability Status harassment, Sexual Orientation and Marital Status harassment, Gender Identification harassment, Political Beliefs harassment, Criminal History harassment, Occupation or Sources of Income harassment,