The Effect of Macro Economic Policy on Nigerian Economics Growth and Development

This research work focus on the appraisal of Macroeconomic Policy on Inflation in Nigerian Economy, also to determine how it enhances the growth of Nigerian Economy. The aim of this research work is to look into challenges and numbers of hypothesis were drawn. Information necessary to address the test of hypothesis was gathered through secondary data, source from Central Bank of Nigeria (CBN). Economic analysis was used to formulate the three (3) models that were stated in this research work.Multiple regressions were also used to test the appraisal of Macroeconomic Policy on Inflation in Nigerian Economy. The findings of this research show that macro-economic policy as a tool for Economic Policy and Growth as a Positive Effect on the Growth in Nigeria. In conclusion, government should ensure that operational problems are tackled prior to sale so that there would not be any barrier hindering the high degree of efficiency that is associated with the stability of the Nigerian economy.Ov er the years, Nigeria has made conscious and determined efforts to attain a high level of social and economic transformation of the economy in order to attain the development goals and including monetary policy, fiscal, policy, exchange control measures and income and price control. The measures adopted were changed from time to time to reflect the changing economic environment and circumstances. This work focuses on two of the policies adopted (monetary and fiscal policy) and examines their uses for economic growth and stability in Nigeria.Since the main burden of aggregate economic policy must fall on either monetary policy and fiscal policy or a combination of both. The question arises as to whether to clear cut distinction can be made between policies which are termed â€Å"MONETARY† are those which are to be called â€Å"FISCAL† The truth is that considerable ambiguity about these terms exist and this often leads to useless debate and confusion. However, monetary policy can be as a measure which deals with the discretionary control of money supply by the monetary authorities with a view of achieving stated economic objectives.In other words, it employs the use of variation in the money supply to achieve economic objectives. Fiscal policy on the other hand may be defined as the policy pursued by a government to influenced economics activities in economy by changing the size and content of taxation, expenditure and public debt with a view to achieving given objective. Although, there two policies are independent tools of economics stabilization, they are often combined by most countries for a greater effect on the economy. Monetary and Fiscal policies as adopted in Nigeria have four broad objectives.The objectives include: ¬ †¢Maintenance of relative stability in domestic price †¢Attainment of a high and sustainable rate of economic development †¢Maintenance of balance of payment equilibrium growth and stability are so closely related that the economic policy o the government should include both of them. Economic growth may be judges from the growth it total output of the economy as measured by annual increases in net national prod, ct in constant price. Such a measure tells us how much bigger the total economy is becoming over a period of time, but it tells nothing about changes in the standard of living of the people in the economy.The more significant measures in the growth in real net national product divided by the number of people in the population. There are many targets of economic growth and development. They include. †¢Income distribution Gross national product Sectoral development (such as agriculture industries etc) †¢The pressure to attain economic stability or our economic is so strong that measures to promote federal government t fidget. †¢To achieve the maximum practicable rate of growth, d is necessary to have stability. This does not mean a perfectly smooth rate of growth , but one that is not interrupted by recessions and depression. Stabilization policies that are usually released annually concerns attempts to stabilize the level of national income by ensuring that serious inflationary and deflationary gaps do not persist so that something close to full employment without rapid inflation can be achieved. The government uses the instruments of monetary and fiscal policies to influence economic growth and development. The instrument of monetary policy available to the Nigeria monetary authorities include: †¢Rediscount rate †¢Interest rate structure †¢Reserve requirement †¢Direct credit control †¢Exchange rate and †¢Moral suasionSome of the Fiscal policies relating to economy a growth and stability in Nigeria include: tax incentives (capital allowance, income tax relief, reconstruction tax exemption etc. relief from import duties, tariffs measures and budgetary measures. The government uses the instruments in achieving ec onomic growth and stability. 1. 2STATEMENT OF PROBLEM This study is basically aimed at -Has there been effort to study the monetary and fiscal policies used by the Central Bank of Nigeria (CBN) in achieving economic growth and stability. -The ability to access the effectiveness of monetary and fiscal policies. Has there been recommendation to correct observed mistake by (CBN). If done, this will enable the monetary authorities to make optimal use of various monetary and fiscal tools at their disposal for rapid economic growth and stability. 1. 3AIM AND OBJECTIVES OF THE STUDY The general aim of this study is to examine the real problem of macroeconomic policy in Nigeria and propose some stabilization policies. While specific objectives are: 1. To study the monetary and fiscal policies; used by the Central Bank of Nigeria (CBN) in achieving economic growth and stability. 2.To asses the effectiveness of monetary and fiscal policies 3. To make recommendation to correct observed mistake by the Central Bank of Nigeria (CBN) this will enable the monetary authorities to make optimal use of the various monetary and fiscal tool at their disposal for rapid economic growth and stability. 1. 4RESEARCH QUESTION Can monetary and fiscal policy be used as a tool to achieve economic growth? Could monetary and fiscal policy assess the effectiveness of monetary and credit policies? Does the policies of the Central Bank useful to achieve rapid economic growth and stability? 1. 5THE STATEMENT OF HYPOTHESISHYPOTHESIS 1 Ho-The monetary and fiscal policy, does not achieve economic growth and stability. HA-The monetary and fiscal policy achieve economic growth and stability. HYPOTHESIS 2 Ho-The effectiveness of monetary and credit policies could not be assess using the monetary an I fiscal policy. HA-The assess of effectiveness of monetary and credit policies will attain using monetary and fiscal policy. HYPOTHESIS 3. Ho-The observed mistake corrected by CBN could not be use to attain economic growth and stat lily. HA-Will correct the CBN from observed mistake so as to achieve rapid economic growth and stability. 1. RESEARCH METHODOLOGY The research work will make use of secondary data obtained from various institution and publication. The data will be obtained from Central Bank of Nigeria (CBN) Federal Office of Statistics (FOS), various publications from local and inter rational journal. The research work would be tested using regression analysis especially ordinary last square method will be used in construction the model. 1. 7 SIGNIFICANCE OF THE STUDY It is hope that this research work will be practically and theoretical significant to the household, firm and government and for the improvement of the whole economy.There is no doubt that this study will benefit quit a number of people especially units involved. 1. 8 THE SCOPE AND LIMITATION OF STUDY This study macro economic tools measure under the period of Structural Adjustment Programme (SAP) and mid seve nty's (70's) (1978-2006) also in examining our effective and efficient the macro economic tools measures have change in the economy s nee 1970's only the activities of commercial, merchant, special banks and central bank will be used. This will be done through looking into the financial indicators in the economy. -The number of banks in operation Money stock in the economy Growth of credit allocation Banks loan and advances Growth of bank loans and advances Average interest rate (%) A detail of this is in the date analysis which should be treated in further study. Most of the information and data used was collected mostly from Central Bank of Nigeria (CBN) through their annual reports bulleting and statement of account. This study shall be carried out exclusively in relation to the Nigeria economy. This study as comprehensive as possible except for some constraints encountered during the course of study.There was a problem of time limit for the completion of the work. The regroup an d hectic academic programmes which coincides with exams and period of the study or research was impediment. Inadequacy of data was also major constraint other limitations of the study are time period under study and lack of current year data. 1. 9ORGANISATION OF THE STUDY The project is structured into five chapters: Chapter One dealt with the introduction which includes brief description of Nigerian Economy, Area of merger in the economy, Relevant and Significance of the study, Definition of terms, Scope and Limitations.Chapter Two is mainly the Literature Review and Theoretical Frame Work of the study, the meaning and definition of Merger, motives of Merger and Acquisition, Merger game and the effect on the economy. Chapter Three based on the research method this include method of data collection, hypothesis to be tested and the statistical tools that are to be used. Chapter Four dealt with the research methodology, data preparation and analysis. Chapter Five is the Summary, Recom mendation and Conclusion of the research study. 1. 10DEFINITION OF TERMS 1.Central Bank of Nigeria (CBN): As he only financial institution established and charged with the day of day management and control of the nation's monetary affairs, the supervision and co-ordination of banking and financial activities of the cc entry. 2. Monetary Policy: Can be described as measures that deal with the discretionary control of money supply try monetary authorities with a view to achieving stated economic objective. 3. Fiscal Policy: Can be desirable as the policy pursued by the government to influence economic activities in an economy. . IS CURVE: This is the locus of point r to of combinations of various level of rate interest (r) and the level of income (Y) that yields equilibrium in this product market. 5. LM CURVE: This is the locus of various combination of interest rates and level of income that brigs about equilibrium. CHAPTER TWO LITERATURE REVIEW 2. 1MEANING AND OBJECTIVE OF FISCAL AN D MONETARY POLICIES Generally, fiscal policy is one of the many policies that are use by the government to influence economic activity of a country at a particular period.This policy involves the control of taxes and government expenditure. It is often called â€Å"power of the purse† instrument and it is design to effectuate changes in output and employment level to the desired standard especially in mixed and free market economies. Aigbokhan (1995) in his book defines fiscal policy as the use of government spending to influence economic outcome through taxation and expenditure or various forms of expenditure so government is directly spending.Fiscal policy like other government policies derives it meaning and direction from the goals and aspirations of the society within which it operate and the people whom it serves pursuits of the goals and aspirations in turn involves the acceptance of the following objective of the and budgetary policy. †¢To make available for econ omic development of the maximum flow with human and material resources consisting with minimum current consumption requirement. †¢To maintain reasonable economic stability in the face of long run inflationary pressure and short term international price movements. To reduce where they exist, the extreme inequalities in which income and consumption standard. Fiscal policy plays an important role in less developed countries (LDCS) because the less per capital income and which lead to government controlling the economic activities because of the condition of the economy. Baunsgaard (2004) observes that fiscal policy in oil producing countries can be profoundly affected by oil revenue uncertainties and volatility. Policy formulation should factor in the exhaustibility of the natural resources and aim at reducing oil revenue volatility passed to the economy.Past fiscal policy in Nigeria has not been successful in this regard. Since both revenue and expenditure have been highly volati le to a large extent reflecting oil price level. On the other hand monetary policy refers to the combination of measure design to regulate the values, supply and cost of money in an economy in consonance with the level of economic activity. Enoma (2002) in his book pin point's monetary policy at controlling supply of money so as to counteract all undesirable trends in an economy may include disequilibrium in the balance of payment.In the same view, Soludo (2005) define â€Å"monetary policy action as any careful or conscious action undertaken by the monetary authority to change the quality, the availability and the cost of money in an economy to achieve a set objective†. There is a consensus of opinion that monetary policy is a policy which aims at influencing economic activities by variation in the supply of money availability of credit and/or in interest rate. In the formulation of monetary policy therefore some attention has to be given to the attainment of these major goa ls of macro economic policy. -Maintenance of high rate employment Maintenance of relative stability in prices -Achievement of high and sustainable rate of economic development -Maintenance of balance of payment equilibriumIn sum, the paramount of embrace objectives of monetary policy could be said to be stable economic growth. However as the foregoing discussions makes clear, the major role of monetary policy in making domestic and external sector stability and thereby creating the macro economics conditions for long term growth. The techniques (tools) by which the monetary authorities tries to achieve the above objective can be classifies broadly into two main categories. a)The direct or portfolio control approach (b)The indirect or market intervention Under a system of direct monetary control, the monetary authority uses some criteria to determine monetary and credit targets and interest rate which are intermediate target to attempt to achieve that ultimate objective of policy. On the other hand, the indirect monetary controls due to the intermediate variables, particularly the market is left to determine investment and credit allocation. It is the attempt to manipulate these policy tools that essentially constitute conscious effort on the part of the authority to regulate the national economy.These tools are as follows:  ¬ (a)Open market operation (b)Cash reserve requirement (c)Liquidity ratios (d)Stabilization securities (e)Discount window operation (f)Moral suasion OPEN MARKET OPERATION (OMO):- it involves discretionary power of the central bank to purchase or sell securities in the financial market in order to; influence the volume of liquidity and levels of interest rate which ultimately will affect money supply. When central bank purchases instruments, it infects money into the economy and bank ability to expand, credit is enhanced and vice versa.CASH RESERVE REQUIREMENT: – Cash reserve requirement are used to complement the operations of OMO. They are fixed as a proportion of bank deposits liabilities require to be deposited with the central bank. They are particularly effective for sterilizing excess liquidity in the banking system and also can be easily monitored on a day basis because they are held by the central bank. LIQUIDITY RATIOS: – liquidity ratios are computed as a proportion of commercial and merchant banks current liabilities such as deposit liabilities, short term inter bank town net balance with foreign branches, and bank free balance with the central bank.Government debts instrument with a maturity of less than eighteen months. Liquidity ratio is used to complement OMO and it is potentially strong tool for restraining credit expansion. STABILIZATION SECURITIES: – Although the use of stabilization securities as an instrument of monetary policy is been de-emphasized essentially because policy has gradually shifted towards indirect control. This instrument of monetary control has been found to be inconsistent with the general philosophy of guided deregulation, although in the past, it had been very supportive of monetary policy.DISCOUNT WINDOW OPERATIONS:- The main goal of discount window operation is to provide collateralized overnight accommodation to discount house as well as banks that could not obtain funds on reasonable terms of discount and/or in the inter bank market. MORAL SUASION: – This is regarded as a special appeal to banks by central banks. It plays useful role in monetary management as a supplementary tool. It enables close and constant interaction between market operations and central bank such interactions promotes understanding and engender mutual confidence between the central bank and the players in the country's financial market. 2. ISSUES IN FISCAL AND MONETARY POLICIES In Nigeria monetary and fiscal policies have been implemented with the aim of achieving sustained economic growth, price stability and balance of payment viability. Utomi (20 05) expresses his own view on monetary control following the Soludo solution on the use of effective monetary policy in 2006 by arguing that monetary restraints reduces the availability of credit and increases its interest cost, it was retarding the flow of expenditures, output and employment and incomes. While monetary case makes credit more available and reduces its interest cost and thus encourages an expansion in these flow.However, a change in monetary policy may take the form of positive actions such as open market sales, increase in required reserve ratios or increase in discount rates which a policy of monetary ease to stimulate the expansion of expenditure will operate through the same process as are restrictive policy but in the reserved direction, such an expansive policy still tend to increase returns on treasury security to improve liquidity of banks to enhance wealth position of all holders of financial assets and to increase money supply.Soludo (2006) in an interview titled my vision for Nigerian banks recognize the expectation of the economy, Soludo said, â€Å"Money capital market should be expanded with the level that is consistent with the economy. To achieve this there should be a refocus more on the monetary function, if it possible to outsource the supervisions of banks†. Duesenberry (1964) argues that some people would like to rely or monetary policy as the primary instrument for controlling aggregate demand.In fact, some would like to see policy decision which influence demand taken out of the political arena while others would like to find a way to disconnect decisions about taxes and expenditures from the issues of employment and inflation. He further explained that fiscal and monetary policies in terms of an annually balanced budget or at least a balanced budget at a full employment level of income would then be possible. This is base on the fact that, monetary policy of a country is directed towards maintaining the right amou nt of money i. . amount of money which will enable stable prices to be maintained and full employment to be shared without introducing balance of payment problems into the economy. Besides, some critics have attached the assumptions of flexibility in monetary policies. They recognized that it takes much less time to put monetary policy into operation than it does in fiscal policy. They propose that it takes longer for monetary measures to take hold, while fiscal policy on the other hand has a direct and powerful impact upon the income stream.Contrarily, monetary policy's first impact is on the asset structure and only through its effect on this structure does it indirectly and with some days affect the income stream, thus heavy use of monetary policy lead to instability in financial markets, while the resulting fluctuations in security or bonds prices may run over it, a general fluctuation in monetary activity Siegel (1965). In addition, monetary policy is more effective in checking off boom condition than in generating recovering from recession condition.If commercial banks reserves are under pressure from market serving operation coupled with a high discount rate and if investment is also largely financed by extension of bank credit, then further construction action by the Federal Reserve will cut deeply into the expenditure circuit and slow down or stop the expansion of the economy. Monetary policy appears to be of limited effectiveness in promoting the high level of employment and high growth rate objective but the economic growth can be best approached through the use of fiscal policy.In fact these few object are naturally re-enforcing rapid economic growth requires a high level of employment and full employment encourages the introduction of labour saving capital goods. Thus fiscal policy contributes directly to both employment and economic growth by increasing gross expenditure to maintain gross domestic product aggregate output level, Baunsgarrd (2004) . He further emphasize that fiscal policy in oil producing countries can be profoundly affected by oil revenue uncertainty and volatility, policy formulation should factor in the xhaustibility of the natural resources and aim at reducing oil revenue volatility passed to the economy. However he painted out that past fiscal policy in Nigeria has not been successful in this regard since both revenue and expenditure have been highly volatile to a large extent reflecting oil prices level. Furthermore, Aigbokhan (1995) argues that in showing the relative effectiveness of monetary and fiscal policy, there is an issue which has engaged the attention of economist for decades that of the relative effectiveness of pure monetary policy and pure fiscal policy in influencing economic activities.Pure monetary policy refers to the change in nominal money supply leaving government or taxes unchanged while pure fiscal policy is one which there are changes in government expenditure or taxes leaving no minal monetary supply unchanged. 2. 3KEYNES DEBATE ON MONETARY AND FISCAL POLICIES Keynes versus monetarist debate gives conflicting advice to government on the role and effectiveness of monetary policy.The Keynesian argue that the interest rate is the most important variable as a tool for the monetary authorities to control the economy, so they argue that monetary policy should be subsidiary to fiscal policy on the other hand, the monetarist argues that a steady growth in the money supply is the best policy to follow and that monetary policy's directed to control money supply is one paramount important. Milton Friedman believes that monetary policy cannot be use to achieve an unemployment which is lower than the natural rate of unemployment.While the Keynesian view argued that monetary policy should be directed at interest rate rather than money supply and that monetary policy should at all times be subsidiary to fiscal policy. The monetarist argued and recommended that control of money supply should be the major concern of the monetary authorities. The general instruments of activist policy are taxes, government spending and the money supply; activist policy can be classified as either monetary or fiscal policy.Keynes (1958) made changes in the long term rate of interest, the main instrument of monetary policy rather than changes in short term rates, he argued that the demand for working capital was insensitive to changes in short term interest rates but that the demand for fixed capital was responsive to changes in the long term rate of interest. Monetary policy is the deliberate control of the money supply and in some case, current condition for the purpose of achieving macro economic goals.Conversely, fiscal policy is the deliberate control of federal government spending and taxes structure and the determination of the volume of tax revenue such explicit purpose of attaining one or more specific objective such as full employment. The income and expenditur e models pioneered by Keynes, view the role of money much differently from the classical quantity theory. He also viewed the link between money supply and desired aggregate expenditure in a different light. He rejected the two classical notions of fixed velocity and full employment.In the Keynes model, monetary policy affects output indirectly through interest rate. Keynes defined fiscal policy as the deliberate use of government spending and taxes to achieve macro economic goal. Although, the federal government account for 44 percent of total (federal, state and local) government revenue and for 39 percent of total government expenditure fiscal policy is conducted through federal budget. In the Keynesian model, the link between increase in government spending and aggregated expenditure is vary directly.Keynes believes that during the 1980s, the world capitalist economies indeed reach equilibrium position but high level of unemployment made this position socially unacceptable. His f iscal policy is based on the premises that demand should be manipulated to ensure that the economy achieves an equilibrium level of income and output which is socially desirable. Although, Keynes rule out other possible sources for increase spending, leaving only government intervention as a dependable solutions to the problem. 2. THE IMPACT OF MONETARY AND FISCAL POLICIES ON THE NIGERIAN ECONOMY The public demand for money balances to hold depends on the level of income and the interest rate of money substituted. The higher the income the public has, the larger will be the money balances is wishes to hold, other things been equal, the higher the interest rate on money substitutes the lower will be the money balances it wishes to hold because higher interest rate will induce people to transfer more of their assets out of money (which yield on interest into securities or other asset which do yield interest).Besides, Imala (2003) emphasizes on the impact of monetary restriction. He ar gued that when banks excess reserves are squeezed, the prices they charge on credit, that is the interest rate are raised, but the lower the level of investment as well as gross domestic product, while the product market decreases. He further agues that credit become higher as interest rate rise, investors and consumers tries to avoid the pinch by reducing their money balances to the barest minimum needed to carry on their transactions and meet precautionary needs.He further argued that rationing of credit reduces the availability of credit and a quick effect in limiting business expansion than they do on higher interest rate while banks sells off part of their government securities to loans and limited by the volumes of securities the bank already have and falling government bond prices in many banks try to sell at once in the capital market.However, a balanced budget seems appropriate when we are satisfied with the existing level of government autonomous expenditure roughly doing, the period of full employment without inflation (A balance budget policy is neutrals government policy that feeds back into the income stream just raise it withdrawal). In fact to avoid the deficit, the annual budget balance raise tax rate to get more money or reduces spending to match reduced tad receipt. If we therefore, believe that the government ought to be trying to expand total expenditure in credit to check the recession, the balance budget prescription to Nigeria economy is quite wrong.Similarly, inflation would generate a budget surplus calling for tax reduction and increase spending to avoid a budget surplus under an annually balance budget policy, this seems clearly than wrong prescription to stabilization purpose because it would speed the inflation ratio than cheating it in Nigeria economy. It should be well noted that the basic framework for stabilizing fiscal policy through government surpluses and deficit is simple and appealing if it is ascertained that the respon sibility of government is to provide economic stabilization for the nation.The larger the excess of government expenditure over tax receipt (the larger the deficit) the stronger will be the expansionary effect of government fiscal policy. Other things been equal conversely, the larger the excess of tax receipt over expenditure (the large the surpluses) the more deflationary governments fiscal policy. Some economist believes that when we want the government to exert strong expansionary pressure on national income a substantial government deficit is desirable. CHAPTER THREE THEORETICAL FRAMEWORK 3. THE THEORIES OF MONETARY AND FISCAL POLICIES Classical economist argues the importance of money as a determinant of aggregate demand. Their views on fiscal policy were less unanimous. During the great depression of the 1930s some of them recommended substantial increase in government spending as a way of increasing demand, output and employment others were quite skeptical about the effect o f fiscal policy. The evidence provides little comfort for extreme Keynesians who focus their attention on fiscal policy and dismiss monetary policy as a mirage and a delusion.And it provide little support to the rigid monetarist who see the quantity of money playing a predominant role in the determination of aggregate demand irrespective of what is happening to fiscal policy. We cannot count with any degree of certainty on the use of fiscal policy alone or monetary policy alone, there is a strong case to be made for using a combined strategy of monetary and fiscal expansions to combat recessions and a combined strategy of monetary and fiscal restraint to fight inflation.By not putting all our eggs in one basket, we may reduce the uncertainty we would face if we were to rely exclusively on either monetary policy or fiscal. Furthermore, there are other reasons for favouring a combination of monetary fiscal strategy. During a boom in aggregate demand, restrictive steps are desirable bu t restrictive actions are painful. When the government increases expenditure or cuts, taxes, deficit will rise thus money will be needed to cover this deficit and which can be borrowed in the financial market. This additional borrowing tends to push up the interest rate.A higher interest rate on the other hand causes a movement along the marginal efficiency of investment (MEI) curve, investment decreases. D D Source: B. O. Iganige Figure 1: The effect of crowding out: The monetarist view This is little question that some crowing out take place, the issue is how strong the investment demand is relatively unresponsive to interest rates and that not must crowding of investments take place. Consequently fiscal policy is a powerful tool for controlling aggregated demand (and monetary policy is weak).Monetarist on the other hand, generally believe that MEI curve is relatively flat as shown in figure 1 and that deficit spending by the government tends to crowd out a relatively large amount of private investment. In casting doubt on the effectiveness of fiscal policy, monetarists make one important qualification. If the government deficit on demand by issuing new fiscal policy will have a powerful effect on demand, but monetarist attribute this effect to a changes in the money stocks, not the government deficit itself. They see pure fiscal policy as having little influence on demand.Pure fiscal policy involves a change in government spending or tax rate unaccompanied by any change in the rate of growth of the money stock. 3. 2 THE RELATIONSHIP BETWEEN MONETARY AND FISCAL POLICIES THE IS-LM FRAMEWORK The economic environment that guided monetary policy before 1986 was characterized by the growing importance of the oil sector, the expanding role of the public sector in the economy and over dependence of the external sector. Hicks (1937) combined the classical and the Keynesian analyses to derive the IS-LM schedules.In a simple term the IS-LM framework refers to the locu s of all pairs of income and interest rates for which both the expenditure and monetary sectors are simultaneously in equilibrium. The IS-LM framework lays emphasis on the interaction between the output or expenditure market represented by the IS and money market represented by the LM. In this framework, spending interest rates and income are jointly determined by the equilibrium in both markets. Income Interest rate Fiscal PolicyMonetary Policy (LM) Source: B. O. Iganiga (macro economics concepts) Figure 2: The Structure of the IS-LMIn the framework, higher income raises money demand and thus link interest rate. Higher interest rate lower spending and thus income, thus the only factor that make the economy to move round is income and interest rate. However, simultaneous equilibrium in the expenditure market and money market exist at only one output level and one interest rate i. e. ye and re. At that point planned savings plus government expenditure and the stock of money in existe nce is equal to the stock of money demanded. The interest rate (r0) and income level (YO) represent the only point at which the two equilibria are satisfied simultaneously.Other interest rates and output levels represent disequilibrium in one or both markets. r0 r1 Source: B. O. Iganiga (Macro economics concepts, theories and application Figure 3 Equilibrium at IS-LM Intersection In figure 3, at interest r1 there is equilibrium in the money market at output Y1 but in the expenditure market at output Y2. Simultaneous equilibrium only exist only at point E0 with interest rate of (r0) and output of (Ye) summarily, figure 3 shows the relationship between money supply, government expenditure and interest rate.In order to maintain price stability and a wealthy balance of payment position, monetary management depend on the use of direct monetary instrument such as credit ceiling, selective credit controls, administered interest, exchange rate as well as the prescription of cash reserve req uirement and special deposits. The use of market based instrument was not feasible due to the under ¬developed nature of the financial market and the deliberate restraint on interest rates. The expenditure market (Is) illustrating the effect of interest rate alone in shifting the aggregate demand schedule.The position of the IS curve depends on the marginal efficacy of investment (MEI) curve. Shift in either or both will cause a shift is IS curve. Therefore example could be a shift in MEI due to technical progress. Net investment will increase at all level of interest rate. Changes in government expenditure or taxation could bring about a change in this schedule. 3. 3MATHEMATICAL AND GRAPHICAL DERIVATION OF IS-LM SCHEDULE Mathematical Derivation For Is Curve Y= C+ I —————————————— (1) C= Co + CY———————————â⠂¬â€Ã¢â‚¬â€ (2) I= I0-Ir —————————————— (3)Y= Co + CY+ Io-Ir ——————————- (4) (Y-CY)= Co + Io-Ir —————————— (5) Y (1-C) = Co+ Io-Ir—————————— (6) Co + Io-Ir Y= 1-C —————————– (7) -IS Curve Income is negatively related to interest rate. r I S 0Y Source: I. A. O. BAKARE (Fundamentals and Practice of Macroeconomics) (LM) Figure 4: IS CURVE When government spending and taxes are introduced, the following relation holds. Y= C0 +C(Y –T + R) + I0 + I(Y, r) + Go—————- (1) Where T= Taxes and Go = Autonomous government spending The slope of the IS curve is given as dr = 1-cy (1-T y) -1y

Question of Authorship Essay

For the past five decades, the world of literature has come to venerate the great works of one man. The tremendous contribution of Shakespeare in Literature remains unparalleled. The sheer volume of the plays and sonnets he had written remain unmet, and the quality of its art remains unmatched. So much so, that there is probably no one inhabiting this earth who hasn’t the knowledge of the great writer. No one graduates from school without having the experience of Shakespeare in their education: his plays are celebrated through staging and his works are the subject of study in, and even outside of, Literature classes. Also, the celebration of Shakespeare and his works are not limited to the confines of education. Theatrical companies earn a sizeable proportion of their profits in staging Shakespeare’s five-century old works. Publishing companies benefit largely in the millions of hardbound copies they have printed of Shakespeare’s works, and the literature he and his works have inspired. With the picture that has been painted, we can see how influential and how big a pillar Shakespeare is in Literature. However, with the exception of literary scholars, not many people are aware of the issue that has surrounded Shakespeare’s authorship of the works that have been claimed to be his since the time man can remember. William Shakespeare of Stratford has always been regarded as the man who wrote the immortal plays and sonnets. But ever since speculations have started to arise, various names have also mushroomed through the investigations of scholars who claim that these names are the ones which we should be celebrating, and not that of the businessman William Shakespeare of Stratford. The speculations started when Alexander Pope brought to the attention of readers the authenticity of the attribution to Shakespeare in a number of his works. Pope attacked Shakespeare’s on the genuineness of works that had been excluded from the 1623 Folio, a collection of Shakespeare’s most compelling works. His criticisms made in the 17th century continued to influence the generations that followed with respect to their opinion on the matter. Primarily though, what has unsettled critics are the dissonance in his the experiences and education received by a theater man in Stratford and the quality and content of the works he allegedly produced, as stated by one source, â€Å"The work attributed to Shakespeare shows a knowledge of geography, foreign language, politics, and an immense vocabulary that many find inconsistent with what’s known about Shakespeare’s education,† (Lanciai). Authorship Majority of the investigations were done through a historical point of view. If we take a look back in history during the time Shakespeare wrote his plays, we would find out how authorship was perceived as insignificant, even illegitimate, in the writing of the book. According to another source, traditional narratives that present the Middle Ages as a ‘golden age’ of forgery for which questions of authorship and authenticity were unimportant (King). What triggered this was the inability of novice writers (especially people of rank) to publish their own name in their works under the regime of Queen Elizabeth. â€Å"A gentleman of rank could not publish under his own name lest he be suspected of having a profession†. This policy was followed, and writers of rank either circulated their work privately or they made use of pen-names (Lanciai Christian). Also, the theater industry during Shakespeare’s time was an unsurveyable community (Lanciai). It therefore follows that while theater was an important industry of the era, it is very challenging to examine the works of the industry. These reasons ultimately lead to the graying of the trace to the real authorship of the works attributed to Shakespeare. Why not Shakespeare? It has been mentioned in this essay that the theater industry was an unsurveyable community during Shakespeare’s time. A piece of information that is known though is that the owners of the theaters were communally owned by the actors, according to Lanciai’s article. Only the exceptional rise in the business, and William Shakespeare was one of them, as he was an accomplished capitalist of those times. Therefore, we can surmise that Shakespeare the businessman was a person considered of rank in his age. If we remember the rule that was imposed on writers of rank, another source argued thus: â€Å"If Shakespeare was a gentleman of rank, then William Shakespeare could not he his real name. By contrast, the William Shakespeare who was a play-broker, part owner of an acting company, and resident of Stratford as well as London would have been in a good position to use and appropriate work written by an anonymous high-born author,† (Price, Diana). How Shakespeare was perceived The man’s (Shakespeare of Stratford) social and professional position in question was described by Pope as this: â€Å"He writ to the People; and writ at first without patronage from the better sort, and therefore without aims of pleasing them: without assistance or advice from the Learned, as without the advantage of education or acquaintance among them: [and] without the knowledge of the best models, the Ancients, to inspire him†¦Ã¢â‚¬  From this description, King surmised that Pope regarded the dialogue of the actors in his works as â€Å"bad conversations†, and that he was only able to get away with this because of the Court patronage. Also, he had drawn from the quote that the quality of Shakespeare’s dramatic writing improved in direct proportion to his level of social and linguistic contact with ‘the better sort’. With this we can already see how Pope has de-merited Shakespeare from the level of literary genius which has always been associated to his name. It also evident that Pope deemed Shakespeare of this position because of the social position he was in, as according to the same article, Shakespeare’s social contamination by his inferior associates and conversation partners contributed to the de-meriting. An argument from another author supported Pope’s claims when another author said, â€Å"It appears that Shakespeare of Stratford was not much respected (or liked) while Shakespeare the author was† (Price). The other side of Shakespeare of Stratford that Pope pointed out in concurs with the knowledge of the author. According to Price’s book, Shakespeare of Stratford was identified by contemporary documents as a money-lender, play-broker, wheeler-dealer, social climber, and sometime actor. No contemporaries of Shakespeare called him as an author, not even people from his community. What also strengthens this argument is the lack of surviving documents written by him which have any literary significance (Price). Aside from these, what’s also disturbing for scholars is the fact that the will left by Shakespeare did not mention of any books that he owned. In Elizabethan period, books were considered important items and therefore were to be bequeathed to relatives or fellow writers. His passing also spoke of his merit as a celebrated modern playwright in his time. Unlike other playwrights, his death did not stir any public notice. Add to that the issue brought about the will he left behind, these things make a lot of people wonder about his merit as a writer. It seems that his will was the only trace of Shakespeare’s literary works. A man named Reverend James Wilmot was said to have searched all of Warwickshire to look for any piece of evidence that would present Shakespeare’s literary activity. Reverend Wilmot did not find any anecdote, letter, document or any memento (Lanciai). Surely, anyone who is claimed to be a writer will have volumes of writings in his home, or any piece of writing at all. The article also explained that Reverend Wilmot’s discovery led him to conclude that Shakespeare really must have another writer. His education also proved nothing but extraordinary. According to Price’s book also, the businessman from Stratford only acquired a grammar-school education at most. While possible, it is difficult to believe that a person of such educational attainment could produce the level of intellect and cultivation found in his works. It is almost unquestionable when one makes the claim that Shakespeare’s works have shaped the way English dramas are to be written, as put by another source, â€Å"He creates and establishes the English verse drama, he gradually develops the English drama into the form which subsequently and invariably becomes the Shakespeare standard (Leahy, William). † This particular writer is one with the critics who says it is impossible that these works of great quality could have been produced by a man with little educational background. Leahy added in his article, â€Å"It’s not likely that Shakespeare could master this form directly without preparatory work in such an accomplished professionalism which is already evident in the first Shakespeare dramas. † What made him say this is due to his non-existent education and lack of experience of Cambridge, France, and Italy. Aside from this, Price adds how scholars point out that his knowledge of several foreign languages is deemed dubious. The article explained that there is no indication that Shakespeare knew any languages other than English, or that he ever left England. The discrepancy between the images of the two persons has fuelled the debates for the authenticity of the businessman from Stratford’s authorship in the Shakespearian works. The Real Shakespeare Among the numerous strings of allegations and speculations regarding Shakespeare of Stratford’s merit to claiming authorship to a number of literary works, a lot of names have also surfaced. Among these people was Francis Beaumont, a young dramatist who passed away in the same year William Shakespeare died. As death could sometimes speak of the greatness of a person, we could surely say that Beaumont was considered as one of the significant people in English drama. The whole of England mourned for his death and paid tribute to the dramatist. Aside from this young dramatist, another man is claimed to be the real Shakespeare. Ben Jonson, who also completely dominates the preface to the first edition of the complete works of Shakespeare, which appeared in 1623, is also suspected to be the real author of the plays (Lanciai). Lanciai adds that Ben Jonson himself has published his complete works first, which could have led him to think that the Shakespeare dramas should also be published. In addition, Christopher Marlowe has been alleged to be the original Shakespeare. Born in Canterbury, he was a learned man who received his education in the King’s School Canterbury, as well as Corpus Christi College, Cambridge through scholarships. The resonance with the quality of education has convinced many scholars, but what was more convincing was the practice he was able to gain in translations, poetry, and playwrighting (Oleg, et al). Lanciai also mentions another probable author to the works in question. After the discovery of Reverend Wilmot regarding the absence of Shakespeare’s literary work, the Reverend believed that a man named Francis Bacon should be recognized as the authentic author. The Reverend concluded that Shakespeare must have been the protective name for Bacon. According still to Lanciai’s article, Bacon’s education, experience and knowledgeableness could be better reconciled with the intellectual level exhibited by the works. Also, as the authorship clearly indicates that the experience were collected from at least the Cambridge university, Italy, and France, Bacon proved to be a probable candidate to the authorship as he had extensively went to these places. To add, Bacon’s education allowed him a position as an ambassador and to also serve as a member of the House of Commons. He was knighted and moved to higher political positions after the ascension of James VI (Oleg, et. al) In conclusion, the works of Shakespeare are not to be questioned with respect to the contribution in Literature and the quality of art that it contains. While the question of the Shakespeare authorship has been around for hundreds of years and is therefore a very important matter to be settled, it would be more important and more contributory if aspiring writers who are inspired by these works to focus their attention to â€Å"what† and not as to the† who. † Works Cited: King, Edmund G. C.. In the Character of Shakespeare: Canon, Authorship, and Attribution in Eighteenth-Century England Lanciai, Christian. A Summary of the Shakespeare Problems. Research Journal – Volume 06 – 2009 Online Research Journal Article. The Marlowe Society. 2009 Price, Diana. Shakespeare’s Unorthodox Biography: New Evidence of an Authorship Problem Seletsky, Oleg, Huang, Tiger, Henderson-Frost William. The Shakespeare Authorship Question.

France's Demands during the Two World Wars Essay

France's Demands during the Two World Wars - Essay Example During both the wars they attacked France from fronts where she was undefended. They searched the French people in the newly occupied areas and forced the French coal miners to work under their supervision during the Second World War. The terror and atrocities prevailed all over. Sleepless nights, uncertainty of returning in the evening to one’s home, fear of separation any moment from the family, burning figures everywhere, unable to leave home without a gas mask, German soldiers walking into homes to rape women and cut off children’s arms, dead bodies strewn all over †¦this was the scene that existed during both the wars. The soldiers’ life became secluded in the trenches and food became sparse; medical help and sanitation declined. The troops living in the muddy, rat-infested trenches died due to diseases rather than attack of the enemies. Even then the fellow feeling and the attitude to share prevailed, unlike the Germans where solidarity gave way to soc ial unrest. The atrocities of the Germans on France were not limited to humans alone. They tormented and used the French circus elephants to haul timber as the Germans felled trees for trench props. During the war France lost vital iron ore and coal resources; territory was lost too. Women and children had to take over the farms and agriculture as 41% of the men mobilized for the war were peasants. This caused great losses in cattle and grains too. In the Second World War France lost about 25 % of its wealth and people compared to 10% in First World War. People were either missing or had died during the war. The battlefields were scarred by trenches and littered with dead bodies. France suffered the most as most of the fighting took place on her soil and she lost millions in the trench warfare. The devastation that was left behind after both the wars can move mountains, why just humans.  

See attachment Coursework Example | Topics and Well Written Essays - 250 words - 5

See attachment - Coursework Example If a species dies faster than it reproduces, there will be a great decrease in population size. The fourth factor that affects population size is the availability of food and an appropriate habitat. Food provides the species with energy and ability to reproduce. In the video, there are some factors mentioned above that affect population size. Firstly, the birth rate of the nutria is quite high compared to other species. This is because the female can give birth to three litters in a year and each litter contains roughly six young ones. Another factor that affects population size is immigration. This evident in the fur farms in Canada and United States of America, where populations of nutria have drastically increased. Another factor is the availability of food and the appropriate environment. This allows for the growth of the species. It is my prediction that there will be a decrease and eventual depletion of the nutria population after the land is depleted of the nutrias’ food resource. This is because the nutria will migrate in search of food in other fertile regions. Secondly, the remaining nutria will eventually die of starvation due to a lack of nourishment. Thirdly, the nutria will become pests resorting to scavenging and stealing food from

The Dell Theory of Conflict Prevention Essay Example | Topics and Well Written Essays - 750 words - 1

The Dell Theory of Conflict Prevention - Essay Example Trade among countries plays a fundamental role in building their economical power. With mutual collaboration in terms of trade, different nations satisfy one another’s needs. In fact, many nations depend upon trade and will suffer from severe economic decline if the trade ended. Once this happens, economic decline will soon be followed by cultural and social decline, and such a nation may collapse as a whole. Role of trade in maintaining the solidarity and integrity of a nation can not be denied. Yet, Friedman’s assertion that trade partners can never fight with each other seems quite exaggerated and abstract, and history provides evidence for this. Although Friedman has referred to the case of India and Pakistan, and China and Taiwan in an attempt to support his argument with facts from the history, yet a careful analysis of the very cases suggests that there were several other reasons that kept India and Pakistan from fighting with each other that were much more stron ger than the maintenance of trade. India and Pakistan did not fight with each other in the start of 21st century because India had realized that Pakistan is also accoutered with nuclear power. Had she started the war, Pakistan would have paid her in the same coin, and the consequences would have been as unfavorable for India herself, as for Pakistan. To say that India did not start a war with Pakistan at that time because she feared she would loose her trade partners is indeed, incomplete truth. Similar reasons can be sorted out for the case of China and Taiwan. Corporate bodies have opened their franchises almost all over the world. Same holds true for embassies. All countries have conventionally maintained their embassies in conflicting countries. The safety of embassies has never been on stake despite that fact that a lot of countries have indulged in war with one another in the past. On the other hand, William Duiker is skeptical about the unity among individual nations on the

Global Humanitarian Assistance of UAE Research Paper

Global Humanitarian Assistance of UAE - Research Paper Example Abu Dhabi serves as the capital of the United Arab Emirates thus making it the center of the state’s political, industrial and cultural activities. In terms of governance, the United Arab Emirates is a Federal Monarchy while its political system draws its formation from the state’s constitution of 1971, which consists of several intricately related governing bodies (United Arab Emirates Ministry of Foreign Affairs, 2012). In essence, the United Arab Emirates is neither a constitutional monarchy nor a republic as the rulers of each monarchy, emirate, retain supreme power within their emirates but a single president retains supreme power over the entire United Arab Emirates. The emirs of the seven emirates choose one of their members to serve as the president of the entire federation, but the chosen emir retains the monarchial character of the individual emirate he heads. In light of this dispensation, the constitution of the United Arab Emirates solely addresses the relations between the emirates and does not impose a constitutional system of governance. Economically, the United Arab Emirates has an open economy, which boasts of a high per capita income and a sizeable annual trade surplus. The economy of the United Arab Emirates is as well one of the most developed economies in Western Asia with a comparatively high Human Development Index. With the world’s seventh largest oil reserves and the world’s seventh largest reserves of natural gas resources, the United Arab Emirates has a relatively high economy. This strong economic potential has influenced the states increased participation in the delivery of global humanitarian assistance. In this regard, the United Arab Emirates is a major donor of emergency relief to nations affected by conflicts as well as naturals disasters in developing countries. In light of this, this paper seeks to addresses the global humanitarian assistance of the United Arab Emirates expressing the extent to which the United Arab Emirates has engaged in issuing humanitarian assistance across the globe. Global humanitarian assistance of the United Arab Emirates The United Arab Emirates is a renowned contributor of global humanitaria n aid having translated its global development and humanitarian aid into an instrument of foreign policy. The philosophy underlying this development is the Islamic belief that helping those in need is a primary duty. Consequently, the United Arab Emirates as well believes that part of its wealth derived from oil and gas resources ought to be dedicated to assisting less providential countries and individuals. In light of this, the World Bank in 2010 recognized the United Arab Emirates as one of the world’s most bighearted contributors to global foreign aid. Global Humanitarian Assistance, an organization that scrutinizes the distribution of charitable aid from governments, in its 2010 report included the United Arab Emirates as the first non-European nation in the international top 10 humanitarian aid donors per head of population. The Organization for Economic Cooperation and Development as well recognized the United Arab Emirates as the fourteenth most generous donor in the globe (Suryatapa, 2010). In essence, the United Arab Emirates is a renowned contributor in global humanitarian aid having undertaken massive humanitarian aid projects in the developing world. The provision of global humanit

Owner Controlled Insurance Programs versus Traditional Insurance Term Paper

Owner Controlled Insurance Programs versus Traditional Insurance Programs - Term Paper Example It is purchased by construction owner for the benefit of builders or contractors engaged with the project, which includes compensation of workers, general liability, pollution liability, builders risk and professional liability among others. OCIP is a comparatively new vehicle in insurance sector for residential projects. Due to rapid growth of defective constructive designs, these policies are becoming highly popular among the builders and the contractors (Grenier, 2001). The study is mainly based on the analysis of OCIP versus Traditional insurance programs. Both the insurance policies play vital roles in the construction sector but OCIP provides advanced reliability than traditional insurance policies, as OCIP wraps up multiple policies provided by the owner to the contractors or the developers in a project including the facilities which are not supported in traditional insurance policies. Risks Associated with OCIP OCIP is commonly known as Wrap-Up Policy in United States. Both the OCIP and traditional policies were developed in 1950’s. The difference between the owner controlled insurance program and traditional insurance program lies with those who procure the policy. In OCIP, an individual party purchases insurance policies for all contractors involved in the project but in case of traditional insurance program, it is not applicable (Olson, 2006).... Although OCIP provides numerous benefits, there are various risks associated with it both for owners as well as contractors which are stated below: Risk of Owners The risk can be identified through various factors including administrative burden which signifies that if OCIP is not managed accurately, it can provide huge administrative load on the contractors. Subsequently, the liability of the construction owners is also likely to increase. OCIPs are useful mainly in large projects, small construction owners are deprived from the facilities of this policy. The small contractors of United States have been witnessed at times to prefer acquiring higher limits of insurances than that provided by owners which can place a negative impact on the contractors (Gibson, 2006). There is always a market risk associated with every program. The market risk signifies that if the market of insurance hardens, there is a possibility of financial risk which can result in increase of premium cost. Bid Pr eparation aspect signifies that there are certain additional costs involved in it, such as retention of a risk consultant, a complete study of advantages and disadvantages of OCIP, submission of proposals and detail interviews (Taylor, 2011). Risk of Contractors The risk of the contractors can also be observed by certain significant factors. For example, limited insurance coverage is one of the vital aspects which focuses on the limitations in the insurance policies provided through OCIP to contractors. This acts as a barrier which the contractors have to face in this policy. Further, is the complicated bidding which highlights on the view that if bidding is done with the contractors of the United States, the insurance also gets included. The contractors would not be able to recover

Examine a global supply chain of clothing industries emphasizing Essay

Examine a global supply chain of clothing industries emphasizing relations of power among main actors - Essay Example The first one was the Multi-Fibre Arrangement (MFA) a regulatory framework that created preferential tariffs and quotas on the apparel industry on the commodities that imported by the developed nations such as U.S., EU states and Canada (Gereffi, & Frederick, 2010). However, in the period 1995-2005, the MFA quotas and tariffs were replaced by the World Trade Organisation’ (WTO) agreement on clothing and textile (Brambilla, Khandelwal, & Schott, 2010). The second crisis was the financial crisis of 2008, which hit the apparel industry resulting in the unemployment, increased social unrests and factory shutdowns due to decreased demand in the developed economies. Zara is one of the giant global retailers in the fast fashion industry incepted in 1975. The company is an entity of the Spanish group Inditex. By 1990, Zara had expanded globally into a number of states including New York, U.S., Paris, France and Oporto in Portugal. Currently, the company operates over 1830 outlets in 82 nations globally, located in Africa, America, Europe and Asia (Inditex, 2011). Zara considers itself as fast fashion retail chain rather than a high fashion brand, which has enabled it to expand and achieve high growth levels. Zara unlike other brands in the apparel industry uses a vertical integration model that encompasses just-in-time, design, sales and marketing (The Economist, 2001). For this reason, the company can respond to consumers demands in a prompt way, and this has been the key driving force for the accelerated growth of the company in the industry. Labour Intensive-This is because it requires a large number of labour forces to produce its goods or services. The degree of labour intensity is measured in proportion to the amount of capital required to produce goods or services; the higher the proportion of labour costs required, the more labour intensive the business (Bartley, 2005). The clothing

Incidents in the Life of a Slave Girl Essay Example | Topics and Well Written Essays - 2000 words

Incidents in the Life of a Slave Girl - Essay Example Yet, the polemic of the novel often distorts our perception of the heroine, driving the focuses from the multidimensional nature of a really existing human being to her reactions to the conditions of her slave life. It is preferable to analyze Harriet Jacobs’ (Linda Brent’) personality with the help of psychology. Linda’s childhood was happy and serene till she was six. Born in a family of beautiful and intelligent mulattoes, she â€Å"was so fondly shielded† that she never dreamed she was â€Å"a piece of merchandise, trusted to them for safe keeping, and liable to be demanded of them at any moment† (11-12). The death of her mother was the first blow. Then she learnt she was a slave. Yet, Linda did not realize the entire sense of the word for the following six years. She was taken to the house of her mistress, the foster sister of her mother, who treated the girl well and taught her to read and write, though it was forbidden by law. Though the mistress tried to replace the girl’s dead mother, she did not keep her promise to give freedom to the girl and her brother. This was a bitter truth poisoning the girl’s perception of the mistress. I would give much to blot out from my memory that one great wrong. As a child, I loved my mistress; and, looking back on t he happy days I spent with her, I try to think with less bitterness of this act of injustice. While I was with her, she taught me to read and spell; and for this privilege, which so rarely falls to the lot of a slave, I bless her memory (16). These lines convey the inner conflict, which Linda continued experiencing even as a grown-up. On the one hand, she understood that that her mistress behaved like most of whites, that she, Linda, was only a kind of a doll for the woman, who played with her without really caring of her. On the other hand, the mistress was Linda’s substitution of the dead mother, and Linda strove for happy recollections of her childhood,

Economic and Environmental Advantage through sustainable Real Estate Thesis

Economic and Environmental Advantage through sustainable Real Estate Development - Thesis Example As human beings were created on earth as the prime form of living specie their actions towards their survival started to effect the earth’s environment. The actions of the human species are collectively known as anthropocentric movements. In its initial days of survival the actions of human beings were environment benign, as they opted to live by initially through hunting, then through grazing and after that through cultivating. Though all these specially cultivation did put pressure on the environment mainly through cutting of trees in order to extract more cultivable lands to support the ever growing population but it was nothing in comparison to what did actually happen after industrial revolution. Industrial revolution initiated an unprecedented level of deforestation towards clearing of areas for industrial setups and to provide more and more wood as fuel to the industries as well as a raw material for industrial, commercial and residential setup. After the initiation of the industrial revolution miles after miles of land were cleared of through cutting of trees and buildings either for industries, office or residence were set up. Unlike the rural buildings that were mostly made up of materials taken from the environment1; these buildings were made out of concrete and other man made materials that are far more durable but had a tendency to heat up the surrounding environment and initiate other environmental maladies. The industrial revolution also started migration from village to towns and cities in search of jobs in industries. Urbanization led to congestion in cities through increased numbers of un-zoned buildings, too high of a person to room ratio and to a biomass that was far from the permissible level on a given piece of land. Commercialization of agriculture; lead to the shifting of technology from conventional environment friendly to energy intensive and chemical prone farming2. Apart from deforestation, and its associated environmental

The War of 1812 Essay Example for Free

The War of 1812 Essay 1. The effects of the War of 1812 on banking, shipping, farming, industry, and transportation. a. The War of 1812 occurred because the British were impeding U. S. shipping. When we won the war, farmers were able to ship their products such as cotton or tobacco overseas. This helped farmers, because they had access to markets. It helped banking because if farmers couldnt ship their products, they had no reason to borrow money. It also helped farmers repay loans they previously got from banks. It helped transportation and shipping, because farmers had to use transportation and ships to get their products to other countries who wanted to buy the raw materials. 2. The â€Å"era of good feelings† as a transitional period. b. Party and sectional divisions fell by the wayside during the â€Å"era of good feelings† with a president who was determined to heal old wounds, but this spirit of unity did not last. Sectional tensions reappeared during the Missouri debates, which brought the issue of slavery and its expansion to the forefront. 3. The causes of the Panic of 1819 and the effects of the subsequent depression on politics and the economy. c. This is a sad tale told many times over the years. America had just got out of the war of 1812. When the war ended, the economy was still based in a war-time production and along with land speculation and little diversification. well, you get a bad recession. We Americans do many things right but there are times we just dont learn. That, my friend, is one of those lessons not learned. 4. The northern and southern arguments during the debates over the admission of Missouri and how they influenced sectional attitudes. d. During the debate over Missouri’s admission, Congressman James Tallmadge of New York introduced an amendment stating that no more slaves could be brought into Missouri and that all slaves born in Missouri after the territory became a state would be freed at the age of 25. 5. The ways in which the Marshall Court changed the status of the federal judiciary and how the Court’s decisions altered the relationships between the federal government and the states and the federal government and business. e. Marshalls Court defined the constitutional standards of the new nation. The great work of the Marshall Court was done in a handful of great cases, especially Marbury v. Madison, McCulloch v. Maryland, Cohens v. Virginia and Gibbons v. Ogden. 6. The reasons why President James Monroe announced his â€Å"doctrine† in 1823 and the impact on international relations at the time. f. The US President, James Monroe, first stated the doctrine during his seventh annual State of the Union Address to Congress. It became a defining moment in the foreign policy of the United States and one of its longest-standing tenets, and would be invoked by many U.S. statesmen and several U.S. presidents, including Theodore Roosevelt, Calvin Coolidge, Herbert Hoover, John F. Kennedy, and others. 7. Presidential politics in the â€Å"era of good feelings† and how they altered the political system. g. There might even be a parallel to the era of good feelings that, in hindsight, can be seen to have existed from 1936 to 1968. Contrast the accomplishments of that erathe winning of the Second World War, the Marshall Plan, NATO, GATT, the GI Bill, interstate highways, and public education, the Civil Rights Actwith the dissension, deadlock, and deficits of the period from 1968 to the present. 8. The reasons why Andrew Jackson was elected in 1828 and the significance of his victory. h. The election of 1828 was significant as it heralded a profound change with the election of a man widely viewed as a champion of the common people. But that years campaigning was also noteworthy for the intense personal attacks widely employed by the supporters of both candidates.

Principle-Agent Model of Employment Relationship

Principle-Agent Model of Employment Relationship Outline the principal-agent model relating to the employment relationship, and describe how pay models can help overcome some of the problems of performance in developing country governments. Introduction Managing scarcity is a major concern both in the private and the public sector all around the world. As the cornerstone of the economic theory the efficient and effective use of the scarce resources has been, since the acknowledgment of this social science, a paramount responsibility for public officials. Whether it was on behalf of the absolutist ruler or about the peoples interest, managing the states resources is a craft that not only has evolved in its tools but also in the scope that it covers, as new necessities arise and evolve at the pace of civilization. In the following sections, we aim to cover the Principal-Agent Model relating it to the employment relationship within the public sector, for which we will develop the main characteristics of the model with a political economy perspective. As Solow (1974) acknowledges, the world has been consuming its exhaustible resources since the beginning of time, and as the process will continue and new necessities will emerge, the state in all its forms needs to enhance its output and efficiency to address these situations. As one of the main inputs for government delivery is human capital, the choice of a proper compensation scheme, with incentives effects considering performance and quality can provide significant effects on output (Lazear, 2000). From this perspective, we will cover different payment models and incentives as tools to achieve a better and wider output in the environment of developing economies where scarce resources are more acute and social needs are more demanding, focused in the provision of the basic elements and services to help people to develop. Finally, and after going through the theoretical ground of the Principal-Agent Model and the mentioned compensation methods, we will relate them with developing country experiences and outcomes in the framework of new public management where, working altogether with other theories and components that includes a varied mix of characteristics (Gruening, 2001) such as, budget cuts, privatization, user charges, competition, separation of politics and administration, performance measurement and improved accounting, among others that we can relate to the neo-liberalist agenda, that emphasises management tools in order to achieve the goal of better public sector performance. Principal-Agent Model In theory of delegation, the core idea of the Principal-Agent Model is that the Principal needs to delegate a certain activity or job because its too busy to do it by himself. This is made by hiring a third party or Agent who will be responsible to perform the defined activities, but as the Principal is busy, it also means that he cannot observe the Agent actions perfectly. So, several ways are to be considered to motivate the actions of the Agent to favour with her actions the interests of the Principal (Gibbons, 2017). To be defined as a Principal-Agent Model some necessary features or core assumptions are required. According to the settings explained by Miller (2005), first, the agent takes actions that establishes a payoff to the principal, along with a risk variable. Secondly, there exists information asymmetries as the principal can view the outcome provided by the agent but not the actions that the latter undertook. Moreover, in many cases, the associated costs of monitoring the agent actions can be prohibitively expensive. Third, there also exists asymmetry in the preferences as those of the agents, as are assumed to diverge from the principals preferences. Also, the agent is taken to be more risk-averse than the principal.   Fourth, the principal is expected to act rationally based upon coherent preferences and is able to take the initiative by offering a contract. Fifth, agent and principal have common knowledge about the game structure, the costs, probabilities of the different outcomes and other variables. Moreover, they are conscious of the agents rationality and her preferences regarding an incentive package that its expected utility is above the agents opportunity cost. Finally, the principal is assumed to have the ability to impose the best possible solution regarding the agents inferred best response equation. In other words, The principal is endowed with all of the bargaining power in this simple setting, and thus can make a take-it-or-leave-it offer to the agent (Sappington, 1991, p. 47). Furthermore, Miller (2005) defines, from the above-mentioned assumptions, two initial results. Outcome-based incentives, to partially overcome any moral hazard problems despite information asymmetries. And, Efficiency Trade-Offs, as moral hazard sets boundaries to both transaction efficiency and the principals benefits. Efficiency in incentives endures a trade-off with risk-bearing efficiency, and the best trade-off or second best solution must involve risky outcome-based bonuses for the risk-averse agent (Shavell, 1979 in Miller, 2005). Asymmetries and Costs The relationship between the principal and the agent is not exempt of unbalances of power that operate in both ways. The former is threatened by moral hazard or informational asymmetries regarding the actions that are to be undertook by the agent. To balance this situation, the theory presumes that the principal will try to narrow these asymmetries by installing information systems and monitoring the agent. Also, they will offer incentives as a way to align the parties interests. In this alignment, principals compensate the agents not only for the collaboration agreement but for the actual result of this enterprise, performing contracts that are output oriented (Shapiro, 2005). Moreover, given the insurmountably costs of monitoring the agent, or public servant, the outcome based contract is a clear alternative against a retribution based on actions (Miller, 2005). In the public-sector sphere, if the official fails in his task, e.g. inclusive poverty alleviation programme, must be removed from office even if his actions were in the best interests of the public. This is not done out of vengeance, but as an incentive for future officials under the same information asymmetry and output-based contracts. Of course, if the programme succeeds, the official must be rewarded. This shows that there is inefficiency along the process, even though the output-based contract succeeds in reducing the moral hazard problem, it does it whilst recognizes the inefficiencies that come along with the solutions achieved, that in most cases are not Pareto-optimal in the relationship between the agent and the principal (Downs and Rocke, 1994). Moral hazard is a key component in the contract formulation. The principals are assumed to be risk neutral and the agents risk averse, as they have bet all in into the contract with the principal, the information asymmetry plays an important part as the agent will do things that might go against the principals goals in order to preserve themselves from risk. Thus, the importance to design tools to minimize this hazards (Shapiro, 2005). In addition, the principals are faced with situations that modify substantially the assumption that is the latter the one who is in control of creating incentives, specifying the preferences and making the contracts for the agents to follow. There exists many common situations in which principals need agents with expertise, or with experience that goes far beyond that of theirs, in this cases the asymmetry of information is reinforced by the shift in the asymmetry of power as it shifts from the principal to the agent (Shapiro, 2005) a common case observed with public officials and politicians. Therefore, by manipulating the incentives offered to the agent, the principal attempts to minimize agency costs or shirking, that is the losses assumed by the principal by her incapacity to align the self-interests of the agent with her owns (Miller, 2005). When it comes to the public service, two observations must be made. First, as there exists knowledge and information asymmetries and they are characteristic in many agency relationships that are opaque and quite difficult to be subject of surveillance, agents self-regulation provides a very important monitoring role. Secondly, many regulatory provisions and self-regulatory arrangements established to control agency relationships are as well agency relationships. Whether they are compliance officers, auditors, internal affairs departments, insurance companies, investment advisors or government regulators, the monitors act on behalf of the principals. Therefore, they also comprise agency problems (Shapiro, 2005). Shirking, cooptation or corruption becomes part of the equation. So, the question of Who monitors the monitors? (Shapiro, 1987) arises, creating a structure of agents controlling agents. The later question demands more attention from the political science view as sanctions are required to induce agents to properly perform their duties. Budget cuts, firing officials, recontracting or voting them out of office are ways used in the public sector to align the agents objectives with those of the principals. As Mitnick (1998, in Shapiro, 2005) explains, these situations inevitably comes with associated agency costs, when they are too high, either in political or economic terms, principals might choose not to expend resources on them. Furthermore, as politicians might not bear the burden of the consequences of the agents self-interested, opportunistic actions, the costs most likely are passed through to the public. This creates the perfect environment for increased laxity of monitoring activities in the public sector (Meier and Waterman, 1998). Contracts, Pay Models and Performance It is clear now that the channel to implement the required balances of power and influence is through the correct design of the contracts where the principals delegation to the agent will be embodied. Sadly, there is not a golden rule for contract design as every relationship is different and requires diverse considerations to achieve the best possible outcome considering most of the contingencies. Nevertheless, there is a caveat to consider as there are substantially different scenarios between the contracts and incentives options for the public sector than those of the private, more flexible, one. We must remember that the beginnings of the new public management and the considerations of the principal-agent theory are rooted in the developments in management techniques provided by the private sector in its search for efficiency and productivity. For this particular reason, we cover the more standardized retributive models to, afterwards, be able to apply them to the public sector with the necessary considerations. One of the entrepreneurs in compensation techniques was Henry Ford who addressed the high rotation of personnel and absenteeism that his motor company suffered by increasing the hourly wages high above the average threshold in the industry. This basic action provided immediate effects as productivity, commitment increased whilst personnel rotation decreased. This decision, though basic today provided a clear example of what incentives can produce in a given organization. But, Fords times are over and the complexity of transactions, markets and peoples needs have evolved into a more sophisticated retribution design. A rather common output-based contract is the Piece-rate payment instead of the classic hourly payment. This kind of contract works for certain organizations, and has proven to be effective in the increase of productivity due to two components: the increased production per worker due to incentive effects and a natural shift towards more capable, results driven employees recruited to fill the posts of those that are unable to produce enough to maintain their previous level of income. This generates profits sharing between the company and the labour force as part of the productivity gains are split among them, whilst encouraging more ambitious workers to differentiate themselves, both characteristics are unable to be achieved with a basic salary retribution (Lazear, 2000). Is understood that covenants regarding quality and other issues must be addressed in the contract to avoid future backfires. There exist different alternatives of contracts regarding the agents retributions. But they all aim to be the optimal solution to the information asymmetry problem. Authors also suggest the analysis of retribution in a time frame perspective, where initially the agent will be paid a wage lower than his alternative wage, with the promise of future, career attached, above the threshold wages as an alternative to avoid shirking when monitoring the agents activities is imperfect. Moreover, this method of delayed-payment or bonding contract is efficient as it doesnt alter the present value of the best alternative compensation. Also, this system provides the principal with an additional tool which is the increasing cost of job loss to keep the agent focused on the principals objectives (Krueger, 1990). A tool that is also related with bonuses or options related compensations. In jobs that are capital intensive and highly routinized, there is also room for shirking, absenteeism, theft, high turnover, waste, misuse of equipment or poor service that have a significant effect on output and performance (Krueger, 1990). These situations observed in certain industries can be also seen in some public offices, with the condiment that in many cases there also exists the limitation of law and regulation regarding the protection of the public employment that creates a further layer of asymmetry in the principal-agent relationship. The relationship can be turned-over as the principal becomes the employees that are unionized and the agent, the organization for whom they work. In cases where it has full negotiation power for determining the labour contract, the unions will demand higher salaries and in-kind payments that goes straight against the goal of maximizing the output as the cost increases (Laffont and Martimore, 2001). Moreover, there exists the risks of overemployment due to the mentioned legislation coverage, that prevents the organization to restructure its personnel and achieve a maximization of output through increased productivity. As Shapiro (2005) acknowledges, over time the agents acquire influence over other groups than their principals that increases their protection against any sanction that might be cast upon them. And as in many cases agents -government officials or corporate directors- outlive their principals (politicians, shareholders), the balance of power may shift. Performance and Development From all the above covered, we clearly observe that performance enhancing measures are activities that arent free of charge. In fact, even in private companies the application of any structural change regarding increasing output or efficiency comes with stressful situations that might be so disruptive that can stop the process. This situation, when taken to the public sector, where the motors of change are elected official with a fixed term in office, provides situations that require strong commitment and enough negotiations skills to prove the workforce and the ultimate principals, the voters, of the necessity of change. In this section, we will cover the approach that developing countries have taken to address and minimize situations that reduce performance or hold back efficiency. Improving Health Service Delivery Performance enhancement is a key factor to achieve the health-associated Millennium Development Goals. Hence, looking for improved ways for service delivery is significantly important. A way to achieve this goals has been the application of government contracting with third parties such as non-governmental organizations (NGOs) practitioners, universities or companies. As Loevinsohn and Harding (2005) expose, contracts for health service delivery provides some interesting characteristics. First, they ensure a more precise focus on measurable results, especially when the contracts are defined objectively with measurable outputs. Secondly, they overcome some constraints that can prevent governments to efficiently use the available resources, such as the ones mentioned in the previous section. Third, the use of the private sectors flexibility can improve service delivery. Fourth, increased autonomy and decentralization in the decision-making process allows a faster response to peoples ne eds. Fifth, as contracting is through public offers, it will increase the efficiency because of price competition or, if its recruiting for staff, will attract better qualified agents. Finally, as these activities are outsourced in its execution allows governments to focus more on its other roles, such as planning, financing, regulation and more varied public health functions. Of course, in addition to the caveats covered in this paper, the thought of contracting non-state institutions to perform public activities comes with other difficulties as contracting should cover a sufficiently large scale to make a difference in aggregate service output. Which in turn, leads to both more expensive contracts and a shift in the balance of power due to principals (government) limited capacity to manage this contracts in the most efficient way once the service is instituted. Hence, there will be unsustainability risks in the contracting (Loevinsohn and Harding, 2005). However, governments have different types of contracts to provide a principal-agent relationship with positive results for society. In a service delivery contract, the state decides the services to be provided, where, and the integration scale in the infrastructure and supply management, where, personnel, equipment or consumables will be, or provided. There are intermediate options such as a management contract, where the agent will take over on the government health workers and take care of the increase in the salary, which will be linked to outcome based indicators (Loevinsohn and Harding, 2005). In this case, there is a limited effect in the principals shift of power as the agent remains in a rather weak position as it can be dismissed if does not accomplish the performance levels pre-contracted. When contrasted with some average scenarios in many developing countries, where the public sector underperforms or barely function at all, due to factors such as poverty, corruption, chronical economic crisis and political instability. Public officials morale is undermined and in some situations absenteeism increases or there are a lack of tasks or resources to work with, pervasive corruption and rent seeking characterises the public sector in many places in the world (Grindle, 1997). Reforms to increase performance and effectiveness are demanded both by the public and by the politicians, whos agency contract with society depends on their performance. Nevertheless, Loevinsohn and Harding (2005) research provides evidence of the impressive improvements achieved by government contracting with third parties in the performance of the service delivery. Whether primary health care in Guatemala or nutrition programmes in Africa, contracting yielded positive results. In some case studies the contractors were proven to be more effective than the state agencies, regarding several measures on quality of service and coverage. As an example, in India a NGO was able to deliver an increase of 14% in tuberculosis treatment completion rates at a lower cost than the public services in a nearby area (Murthy et al. 2001). Contracting under specific, results driven conditions has proven to deliver impressive and rapid results. The studies made on programmes that are ongoing suggest that there is a link between the high performing programmes with increased autonomy given to contractors, cases such as Cambodia, where Rural Primary Health Provision and District Hospitals, where output-based service delivery contracts provided better results than traditional management contracts. A result consistent with the characteristics of hospital services where autonomy in the workforce management is significantly important to improve performance (Harding and Preker, 2003). It is to be expected to generate controversy by contracting with non-governmental institutions to provide services. Critics often relate this movements as pro neo-liberal desires of privatization, while financing them with public resources with the objective to limit the government involvement in services such as health care or education. However, some programmes are designed and implemented due to internal analysis of the lack of expertise or proper resources to cover and deliver a defined set of services, a process that can lead to more efficient expenditures without reducing the public expenditure for that item (Loevinsohn and Harding, 2005). Hence, increasing performance and output. The above-mentioned examples are among many others where new public management techniques or concepts apply. The Principal-Agent model expressed in the relationship between the state and a third party specialized in service delivery shows that such a complex relationship should be followed in those activities that allow to be critically measurable, without being put through subjectivities in the performance analysis. When the Principal-Agent relationship is put under the scope of political science there are interesting considerations to be made. When we analyse the delegation process or the objective we might observe that maybe the goal is to provide an enhanced credibility in the commitments made, or to avoid the cost of unpopular policies. Instead of aligning the interests of the agents with theirs, principals who seek credibility from their agents choose other agents with different preferences regarding policies and provide them with considerable autonomy and discretion as a way to provide contracts with independence whilst seeking accountability for their actions (Majone, 2001 in Shapiro, 2005). As we can see, contracting under the principal-agent model is not a simple activity. There are so many variables that can affect the efficiency of the objective rather than its effectiveness, that it proves complicated to perform corrective measures. Therefore, the monitor eye is so important. The threat of future sanctions provides the agents, and in the public arena, some principals, with the incentives to perform their activities properly. Moreover, in democracies, where congressional oversight is available, and where effective incentives systems are applied, less often sanctions should be observed in the form of hearings and investigations. Direct and continuous monitoring of inputs rather than results proves to be an inefficient tool for controlling the agent (Miller, 2005). This provides a further incentive for the proper implementation and design of outcome-based contracts. Conclusion In the present paper, we have gone through the standard framework of the Principal-Agent model, where we have covered the technical requirements to be met in order to perform this kind of contracts. Always from the basis that is the Principals need of delegation of a certain activity, the trigger for entering in this contract based relationship in which there exists characteristics such as information asymmetries, efficiency trade-offs and relatively high monitoring costs associated. Furthermore, we have gone into a deeper analysis of the causes and costs related to the different asymmetries that can be observed in the principal-agent relationship and the particular impact that this can cause in contracts performed with the public sector. For which we have also covered the mainstream contract typology, the intrinsic objectives of the correct formulation of the agreement in order to avoid shirking and goals divergences. To finally, approach performance issues with developing country experiences related to the health sector as it is one of the public services that can have its output clearly and objectively measured without further complications or subjectivities. From all the above covered, we clearly can see that Principal-Agent contracts applied to governments is possible and yields positive results. But, it is also clear that is not an easy or systematic task. As it requires many considerations and attention to the caveats mentioned and many others that can apply due to the intrinsic characteristics of the tasks and the outcomes negotiated. We must also bear in mind that this kind of contracts also bear internal difficulties within the government agencies as not all of them are fit to be part of this kind of arrangements. In addition, we cannot think of implementing an effective principal-agent relationship without pursuing other structural changes in the governmental structures. As Robert McNamara, former president of the World Bank, claimed in most countries, the centralized administration of scarce resources both money and skills has usually resulted in most of them being allocated to a small group of the rich and powerful. This is not surprising since economic rationalizing, political pressure and selfish interest often conspire to the detriment of the poor. [à ¢Ã¢â€š ¬Ã‚ ¦] experience shows that there is a greater chance of success if institutions provide for popular participation, local leadership and decentralization of authority (World Bank, 1975, p.93). Moreover, Rondinelli (1981) focuses on the efficient delivery of services depending upon the effective organization at community levels to have a strong interaction with the agencies in charge of service delivery to establish priorities and set objectives. This paper aimed to observe the impact of the Principal-Agent Model as a tool to gain in efficiency and increase performance levels in the public sector. 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