Economics of the EU Essay Example | Topics and Well Written Essays - 2000 words - 2

Economics of the EU - Essay Example Country specific shocks are similar to asymmetric shocks across the European Monetary Union. Their nature is influenced by the economic structures from this area. Varied economic structures increase the probability of the asymmetric shocks. The costs executed by asymmetrical shocks under European monetary union are dependent on the relationship between nominal and real inertia within European countries (Egger et al., 2011, p.115). Various economists have compared seemingly high nominal inertia in the United States labour markets with comparatively little European nominal wage rigidity. As a result, these economists have made conclusions that costs within Europe that cause nominal inertia are not that high. This argument, however, seems to assume nominal rigidity in price context, which may be practically important like inertia in wages. Also, provided nominal rigidity exists, the cost it enacts in restoring actual equilibrium is greatly dependent on its relationship with real inertia in the economy (Bond et al., 2001, p.340). The framework of modern government has improved as a result of the economic exclusion of currency area, which has become essential. This is especially through the imposition of inconvertibility and exchange controls. Given the practical need for stabilization strategies in existing economies, an area required a different currency. If provided with macroeconomic shock, the financial costs of adjustment would be higher compared to those of changing the exchange rates, through changes in price levels and or factor mobility (Houssa, 2008, p.320). For separate currency areas, the case is apparently held well unless the effect of the shock varies with regions, that is, asymmetric. Suppose the impacts on all were similar, then the exchange rate of modifications required for adjustment would also be e qual for all. In this case, separate currencies would be useless since they would have no purpose. Applying the theory of OCA, any two

Historical Personalities Of World War II Essay Example | Topics and Well Written Essays - 250 words

Historical Personalities Of World War II - Essay Example The Populist Fronts tended to be so dear to Stalin that while he intended to rouse the Russian masses by gathering them around the idea of opposition to Hitler, at the same time Stalin was trying to strike a deal with the Nazi dictator because he considered Hitler to be an imminent threat to the Russian bureaucracy. In that context, Stalin played into the hands of Hitler by allowing the Nazi’s to have a striking success on the Western front before Hitler turned his attention to the East that is the USSR. As per Trotsky, had Stalin not been so particular about consolidating his hold on the USSR, it would have definitely allowed him to pressurize Hitler on the Eastern front, thereby perhaps inhibiting him from advancing so confidently in the West. Somewhere, Stalin’s strategy of allowing Hitler to initiate World War II proved to be short-sighted in the sense that he believed that he will manage to escape getting involved in the war. Had Stalin somehow conveyed to Hitler that Russia was going to offer a stiff resistance in case of an expansionist endeavor by Germany, perhaps World War II could have been avoided?

Comparative Analysis of Keys to Successful Revenue Synergy Programmes Essay

Comparative Analysis of Keys to Successful Revenue Synergy Programmes - Essay Example That’s the reason behind companies’ preferences for achieving cost synergies at the loss of revenue synergies. It is quite interesting to know why companies do not make additional effort into recognising and providing revenue synergies although investors may give an increased level of confidence to achieve cost synergies and they show heightened awareness over revenue synergies, therefore, offer an increased value premium. Need is to provide increased insight to investors on revenue synergies so that the market could present a complete perspective of the strategic reasoning and better value as an outcome (Griffin & Sheikh, 2012). Revenue increase, its criticality in valuation and its provision after acquisition can be derived by dividing various sources of revenue synergy, aimed through the acquisition, such as: expansion into a new sector; expansion into a new areas; cross-selling products and services; Advantages from intangible rights and technologies; and growth in current market share. There is need of a closer insight at the difference between cost savings and revenue increase as add-ons to success, in the context of the degree of total value of the acquisition coming through revenue synergies and through cost synergies. It needs to be clear whether a pre-completion synergy appraisal requires a detailed bottom-up process or it should be a top-down high level method. Before finalisation of the in-advance synergy appraisal, it needs to be confirmed whether synergy aims are clear to all leading stakeholders (Griffin & Sheikh, 2012). Normally, there is no ambiguity relatively in the difference of drivers and expectations of M&A functions changing with time and as per the ongoing economic environment. It is interesting to observe the market behaviour after the recuperation from the recession worldwide on whether companies are currently acquiring for achieving revenue synergies or cost synergies (Griffin & Sheikh, 2012). When acquisition values co rrectly show possible synergies from both cost savings and revenue increase and when these are of central concern to the management after the acquisition, the results are more possible to fulfil or exceed aspirations (Griffin & Sheikh, 2012). The Kraft acquisition of Cadbury was projected to offer $1 Billion in Synergies, as declared by the Kraft Foods. The incremental revenue synergies of $1billion were excluded of $750 million to be achieved in cost synergies by 2013. These revenue synergies, according to the Kraft, would be derived from the business increase in developing regions from one/fourth of the total revenue to approximately touching one/third after the merger. A statement was made by Kraft Foods’ CFO Tim Mclevish prior to an analyst conference in New York, stating that â€Å"This combination of factors gives us great confidence that our company will generate organic revenue growth of 5% or more, margins in the mid- to high-teens and EPS growth of 9% to 11%† (Tse, 2010). The confidence of the Company management is getting reflected from the acquisition, as it expects to become a long-run high-bracket performer in the food industry world wide. Presently, the Company is earning more than 50% of its revenue from outside North America, from countries like Brazil, China, India and Mexico, where GDP and demand growth are the most firm (Tse, 2010). Kraft CEO, Irene Rosenfeld, also holds the same opinion from the â€Å"unique and complimentary combination† of Kraft and Cadbury, stating that, â€Å"

Plato and Aristotle Essay Example for Free

Plato and Aristotle Essay Plato the great Greek classical philosopher lived between c. 427 and c. 347 BC. Plato together with his mentor, Socrates, and Aristotle (384-322 BC) are credited with helping lay the foundations of Western philosophy. Plato was a student of Socrates and the unjust death of Socrates by execution is thought to have profoundly affected influenced him. Plato would later write in his dialogues the teachings of Socrates. Besides philosophizing, Plato was also a mathematician who helped show the distinction between pure and applied mathematics. Plato also founded what is thought to be the first institution of higher learning in Western world, the Academy, in Athens. Plato was a sophisticated writer and this is evident in the dialogues. The dialogues have continued to be used to teach philosophy, logic, rhetoric and mathematics. Indeed Plato’s philosophy has influenced so many, but not necessarily likeminded individuals and they include Plato’s student and his greatest critic, Aristotle, Plotinus, Philo, St. Augustine, Avicenna, St. Bonaventure, Hegel, to name just but a few. The Christian Church was highly inspired and informed by Platonism. The Cambridge Platonists were so named because of the indelible mark Plato had left in their scholarly lives. Some other philosophers like Friedrich Nietzsche together with his followers would attack Plato teachings. The list is endless. Plato wielded so much influence and this drove Alfred North Whitehead to observe famously: â€Å"All Western philosophy consists of footnotes of Plato. At the heart of Platonism is the theory of forms, which will you find with much surprise that Plato only deals with it almost in passing in his dialogues. Nevertheless the theory has come to be a tool that can help us understand Plato’s approach to ethics and metaphysics, aesthetics and epistemology. Plato developed the theory in his middle-period dialogues like Phaedo, Symposium, and Republic and then later criticized it himself in Parmenides (Brickhouse and Smith, 2008). The theory is an explanation of Plato’s belief that there exists an immaterial Universe of ‘forms’, or perfect aspects of everyday things such as table, bird, ideas/emotions, joy, action, etc (uororegon. edu/plato. html, par. 3). This means that the objects and the ideas in our material world are mere shadows of the forms. To be able to understand the theory of forms better we first need to understand what forms as Plato viewed them. A form is a conceptual property or quality. If you can take an object and then separate that object and consider it by itself then it is form you are contemplating. If we could use the example of a basketball, separate its roundness from its color, its weight, and perhaps its texture and then think just of its roundness, this is the form of roundness. And as Plato put it the roundness exists apart from the basketball and in a different mode of existence than it. Form is not only the idea of roundness you have in the mind, form exists independently of the basketball and also independently of whether someone thinks of it. This applies to all round things, not just basketball. They participate or copy the form of roundness. Forms differ from material objects because of the properties they have. The first property of forms is that they are transcendent and unlike material things do not exist in time and space. A basketball exists at a particular place and at a particular time. The basketball’s roundness form does not exist in space and this would explain why they are unchanging. A form like roundness will never change and it does even exist in time. It remains the same at all times and at all places. You can instantiate a form in any different place or time and it will still be the same. Even if all objects that are round are destroyed the property of roundness would still exist. The other property of forms is that they are pure i. e. hey are properties separated from all other properties (Ryle, par. 7). To use the example of basketball still, we will notice that it is composed of many properties apart from the roundness and this include ballness, orangeness, elasticity, etc, and all are put together to make one basketball. Therefore there are many forms existing by themselves, apart from time and space. Roundness is just pure roundness and so is orangeness. Forms are different from material objects because they are transcendent and pure. Forms can also be understood as being archetypes. This is means that they are the perfect examples of the property they represent, they are the perfect demonstration upon which all material objects are based. Forms are also Ultimately Real entities. Every material object is a copy of a collection of forms. The other thing to note about forms is that they are Causes meaning they give explanations of why things are the way they are and they are also the source or origin of the being of things ( Banach, par 11). The last aspect of forms is that they are Systematically Interconnected. This is to say that forms encompass a system starting from the form of the Good moving from more general to more particular – from more objective to more subjective The general structure Plato’s argument goes like this: we do believe that the more objective a concept is, the more real the thing it represents. This we do by using objectivity to distinguish appearance from reality. So the more objective you get, the more real you get. Plato’s second premise is that forms are more objective than material objects. This leads to the conclusion that forms are more real than objects. Plato says that the world we perceive with our senses often deceives us, a phenomenon that would not be present if the world and the objects we perceive with our senses were real. It appears that all the objects we perceive are simply images or experiences of our mind. They are subjective points of view for real things. The world we see is not the real world but its image and it is difficult to ascertain at what level of observation we get in touch with the real objects that make up the world. So we are forced to assume that the more objective the concept of description is the more real the object it describes. Through what is called dialectic process we combine many different points of view to achieve a more objective description that accommodates all the other common points of view. For Plato therefore real objects cannot be the subjective images we perceive. The everyday material objects like chairs, tables, trees, are different in that they take into account all of the subjective images we form of a single object. But we should not take this as the real object because: we can only get in contact with these objects through subjective image. They also contain many different properties that are combined. Lastly, these objects are always changing. As such the only level that things really exist is at the level of single properties removed from particular objects. What we perceive of the world are subjective perspectives and unless there are forms, it would appear that some aspect of relativism is true. Relativism holds that every thing in existence is subject to a subjective view of truth, beauty, truth and justice. Plato disputed relativism saying most of the times we objectively discuss and argue about concepts like beauty, truth and justice and as such this dialectic process helps us understand them better. So if there forms of beauty, truth and justice then it is possible to objectively criticize subjective points of view about these things. Plato writes that forms approximate forms. As such the form of beauty is perfect beauty and the form of justice is perfect justice. Conceiving of Forms in this way was important to Plato because it enabled the philosopher who grasps the entities to be best able to judge to what extent sensible instances of the Forms are good examples of the Forms they approximate (Philosophyprofessor. com, 2008) Theory of forms can aid an individual make judgments of good and bad, better or worse by participating or copying the attributes of the all the good practices around us. If we understand the concept of something we can also tell if the concept is one that we should aspire to. Teleology is the study of goals, ends, and purposes. Telos means â€Å"end† or â€Å"purpose†. A person holding a teleological world view believes that the end of things provides meaning for all that has happened or that will occur. If one holds that history has a timeline with a beginning and end, in a teleological view of the world, then the meaning and value of all historical events is derived from their ends or purposes. Aristotle, Plato’s student, is the leading proponent of the teleological view (Hooker, par. 1). In giving his four causes (aitia) for things, Aristotle lists the end/purpose for which the thing was made as the most important. Aristotle conducted a causal investigation of a specific department of reality which result in causal knowledge. Causal knowledge is the knowledge of appropriate causes. Aristotle emphasized the concept of cause and this explains why his theory causality is sometimes referred to as the doctrine of four causes. According to Aristotle, what cause is, and how many types causes there are, is what is key to a successful investigation of the world around (plato. tanford. edu/entries/aristotle-causality, 2008) Aristotle says that we can deduce that we have knowledge of a thing if only we have grasped its cause, or its why. Aristotle provides a general account of the four causes. It is a general account because it is applicable to everything requiring an explanation and even includes artistic productions and human actions. In Aristotle theory of causality, there are four types of causes that can be used to answer a why-question. These are: 1. The material cause, or â€Å"that out of which†, the bronze of a statue . The formal cause, or â€Å"the form†, â€Å"the account of what-it-is-to-be†, the shape of a statue 3. The efficient cause, or â€Å"the primary source of the change or rest†, the artist, the art of bronze-casting the statue. 4. The final cause, or â€Å"the end, that for the sake of which a thing is done†. (plato. stanford. edu/entries/aristotle-causality, 2008) The four causes can all explain something. The start of the making of the bronze statue until it is finished can be explained by all the four causes. The efficient cause in the production of the statue requires to be elaborated in that Aristotle thought the art of bronze-casting should be picked over the artist who has mastered the art as the appropriate specification for the efficient cause. Aristotle chooses to do this because he is trying to provide an explanation of statue production which does not make reference to the desires or beliefs or intentions of an artist. The four causes all offer a teleological explanation for the production of a bronze statue. The type of teleological explanation provided above does not depend on such psychological concepts as desires, beliefs and intentions. This is because Aristotle wanted a model that could also be used to investigate nature. Some people have tried to point out that Aristotle tries to explain nature using an inappropriate psychological model, a model that has a purposive agent that is sensitive to the end. But this assertion can be countered by saying that Aristotle does not â€Å"psychologize† nature because his inquiry is a teleological model free from the psychological factors. Aristotle does not always disqualify the beliefs and desires. In the case of the production of the bronze statue, one may be interested in a particular bronze statue because it could be the great achievement of an artisan who has mastered the art and applied it distinctively. In this case it is in order to include the beliefs and desires of the artist. Aristotle causal theory is not only used to explain nature but can to explain many other areas that make up the human existence. It certainly can help us make good judgments concerning the good and bad. This is true if we can think up the four causes before we do or say anything. The four causes can act as guide to all we do and say, we can also use the four causes to determine the usefulness of something. If every time we think of the purpose or the goal of something we can certainly be able to tell if it is a good idea or a bad one before we do it. As such we will be in a position to make sound judgments. When we compare Plato’s theory of forms and Aristotle theory of causality what possibly is the difference or the similarity of the judgment that one can make? Plato’s theory is based on concepts that we do not see but are in existence; as such we should aspire to these qualities. In instances where we need to make just judgments we should be guided by what we know as perfect justice. It would appear that Plato’s theory of forms would be problematic in dealing with many problems of the world since we are required to transcend it. Aristotle’s four causes on the other hand seems more suited to us. It is easy to grasp and it is easy to determine the causal reality. Plato’s theory of forms is good only in as far as it is being handled by person with better understanding of how it really works. This is then means it cannot be used by everybody except those schooled in philosophy. Aristotle’s teleological explanation of the world is very applicable in the world today and in fact almost every in the society can use it. It is a just a matter of thinking what an action will achieve, the end. So the Aristotle’s teleology is more or less available to the general population than Plato’s theory of forms where they will have to conceptualize things.

The Main Causes Of The Holocaust History Essay

The Main Causes Of The Holocaust History Essay The holocaust is considered as one of the most horrific times faced by the Jewish community in Europe and the world at large. German dictator, Adolf Hitler is blamed for having initiated the Holocaust which saw more than ten million people murdered including about six million Jews. The German dictator was known to be a very anti-Semitic character as reflected in his Mein Kampf. Though much of the blame for the holocaust has been put on Hitler, he is not solely to blame as other various causes can be identified to have initiated the holocaust (Yahya, para 3). This paper shall provide an overview of the causes that resulted in one of the worlds worst war crimes to have ever been committed in the human history. The holocaust is regarded as a systematic, bureaucratic state sponsored persecution and murder that was directed towards the Jewish community in Europe just before the Second World War. It is claimed that close to six million Jews were killed by the Nazi regime together with their accomplices. The holocaust did not just target the Jewish community but also other groups that were seen to be inferior including the Roma [Gypsies], the disabled, and people of Slavic origin. There were also other groups which were persecuted based on their political, ideological and behavioral grounds. Such groups included the Communists, Socialists, Jehovahs Witnesses and the homosexuals (United States Holocaust Memorial Museum, Para 2). A pictorial representation of the massacre during the holocaust By the early 1930s, the Jewish population in Europe was above the 9th million mark and most of them resided in nations which the Nazi would occupy or had influence during the time of WW II. By the time the Second World War came to a close, the Germans together with their associates had killed two in every three Jews as part of the Final Solution policy adopted by the Nazi regime (United States Holocaust Memorial Museum, para 3). The Jews were exterminated by being confined in overpopulated camps, being subjected to systematic murder by use of gas chambers, overworking them without food to death and committing them to mass murder before being buried in mass graves. This has been argued to be the largest scale of genocide to have ever been committed in human history. The holocaust is said to be a history of enduring horrors and sorrows as it reflects the extremes that human beings can go without any spark of human concern nor any act of humanity. According to one survivor of the holoca ust, it was painstaking to explain how the holocaust was carried out. He had this to say, There were not six million Jews murdered; there was one murder, six million times (BÃ ¼low, para 3). The Nazi rise to power is seen as the leading cause of the holocaust experience. Following the defeat of the Germans in the First World War I, the Versailles Treaty inflicted more pressure on the wounded Germany. The treaty is known to have required Germany to accept the blame of instigating the War and therefore accept responsibility of paying huge sums of money to the Allies. Germany did not have money and therefore took loans from the United States to pay the financial penalties of the war. With the toll of the Great Depression taking a high on the United States economy, the financial institutions in the US which had lend Germany started to demand that Germany repay the loan advancements. This resulted in even more economical suffering for the Germans. According to Yahya (para 4), the Nazis promised to make Germany a great country, they took over the government to fulfill these promises by rebuilding the nation. Since everyone wanted to see change in their country for the better, the Nazis were elected and took control of the government with the hope that they would bring the much desired change The holocaust could not have been carried out without the support from the public. Propaganda therefore became a very crucial element in the Nazi political orientation. Josef Goebbels was made the Minister for propaganda by Hitler and he rose to become one of the most known figures amongst the public. He worked hard to convince the Germans that the Aryan race was the most superior. In addition the use of propaganda was extensive in the whole country especially against the Jews. The Jews continued to receive much hatred and suffering in the hands of the Nazis: The economic troubles of Germany were blamed on the Jews. They were accused of taking all the money for themselves. The Nazi party generated extensive propaganda to this end. As anti-Semitism grew within the population, the things done to the Jews by Hitler and his army began to be widely seen as acceptable. Herding Jews into slums, burning and taking their businesses and finally sending them to camps all became common (Rakoczy, para 4). The Jews found themselves on the receiving end as the propagandist minister worked hard to spread hatred towards them from the public. According to Goebbels and Hitler, propaganda was an important aspect since they reasoned that when lies are repeatedly heard, eventually they gain acceptance among the public. To ensure that the public was able to listen to the propaganda, radio sets were sold to the public cheaply and the government had control of all the radio stations while forbidding treason charges against the government in the media (Lieberman, para 4). Once the propagandas became popular anti-Semitic sentiments gained momentum. Hitler supported the racial anti-Semitism as opposed to the religious anti-Semitism which was the hatred that was directed towards the Jews who refused to be converted to Christianity. Racial anti-Semitism on the other hand was the hatred directed towards anybody who could be traced back to a Jewish linage even if the person in question was practicing Christianity. Hitler is known to have facilitated the creation of the Jewish ghettos, burning of the businesses belonging to the Jews and distributed The Protocols of the Elders of Zion, a book that claimed that the Jews were out to take over the world. It can be argued that Hitlers belief in anti-Semitism was one of the key aspects of his motivations (Lieberman, para 5). The other concept that contributed to the development of the holocaust can be said to be the lack of intervention from the other nations in stopping what was happening in German. During the Evian conference that took place prior to the war, the US and Great Britain together with some other countries gathered to discuss the events in Germany and during this time, the Jews were allowed to voluntarily leave Germany in case they wished. The nations at the conference discussed the need to raise the Jewish quota that could be admitted in their territories. Surprisingly, by the end of the conference, only the Dominican Republic had opened their boundaries for the Jews fleeing away from the Germans. The obsession that Hitler had, of completely destroying the Jews has also been associated with the fact that He had suffered from syphilis while in Austria as a young boy which was not treated and it may have resurfaced in his later years. The resurgence of syphilis can lead to many eventualities as it may affect the nervous system and the brain. Critical examination of Hitler indicates that he might have contracted syphilis in 1908 while in Vienna which only reappeared in 1935 when it was at the tertiary stage. The effect of the disease on the brain includes aspects of paranoia, megalomania, loss of sense of reality, loss of moral senses and fits of anger (Rakoczy, para 6). These are the characters which were observed in Hitler during later life. Conclusion It can be argued that there were various factors attributed to have caused the holocaust. Such factors range from the social, economic, political and individual factors. In a nutshell, they include the anti-Semitism sentiments, demonization of the Jews, the Versailles Treaty with its economic woes on Germany, the Nazi regime and the subsequent the public support without leaving out the mental health of the Nazi leader that is said to have been aggravated by the untreated syphilis (Kimel, para 1). The holocaust has gone down the history books as the most atrocious event to have ever happened among the human race. The holocaust was encouraged by the Nazi regime and the world failed to act fast to stop it. Nevertheless, the causes of the holocaust are many and varied as opposed to being though to have been Hitler alone. Though Hitler was to squarely be blamed for he was the German leader at the time of the holocaust, the causes of the holocaust were gradual and cumulative for over an ex pansive period of time. Work Cited BÃ ¼low, Louis. The Holocaust: Crimes, Heroes, and Villains. 2010. Retrieved on 20th October 2010 from; Holocaust.Web.28 Dec 2010 from; http://www.auschwitz.dk/anker /holocaust/. Kimel, Alexander. Direct Causes Of The Holocaust. 2010. Retrieved on 20th October 2010 from; http://kimel.net/direct.html. Lieberman, Daniel. Causes of the Holocaust. 2009. Retrieved on 20th October 2010 from; http://www.associatedcontent.com/article/1353270/causes_of_the_holocaust.html. Rakoczy, Christy. Why Did the Holocaust Happen? 2010. Retrieved on 20th October 2010 from; http://answers.yourdictionary.com/history/why-did-the-holocaust-happen.html. United States Holocaust Memorial Museum. The Holocaust. 2010. Retrieved on 20th October 2010 from; http://www.ushmm.org/wlc/article.php?ModuleId=10005143lang=en. Yahya, Hasan, The Causes of the Old Holocaust Are Building Up For a New One. 2010. Retrieved on 20th October 2010 from; http://www.articlesbase.com/strategic-planning-articles/the-causes-of-the-old-holocaust-are-building-up-for-a-new-one-1918168.html

Analysis of the Housing Market in the UK

Analysis of the Housing Market in the UK Introduction For most people in the UK, as in other countries, the purchase of a house is the single largest expenditure they ever make. In contrast with other purchases, a house is not only something that provides highly desirable services – convenient and independent housing – but it is also the single largest element of household wealth. For homeowners, this asset motive for buying a house is becoming increasingly important. As a store of value, houses are increasingly becoming both a critical component in households’ long term financial planning as well as a basis for raising consumption. Just like possessing a portfolio of valuable stocks and bonds, owning a house whose market price amounts to greater wealth. It follows, then, that a change in the market value of a house will change the owner’s wealth, and, consequently, the owner’s consumption expenditure. While the housing market in the U.K. has experienced several dramatic phases in the past three decades[1], its behavior in the last decade or so is not only without precedence but it is also a reflection of a fundamental transformation in the economy’s financial system. Whether being labeled as the product of ‘irrational exuberance’[2] or being described as a ‘bubble’, housing market developments have spawned a wide body of thinking that is increasingly taking on a nervous tone – especially among economists. A quick survey of the macroeconomic literature related to the housing market reveals that the period from the late 1990’s to around 2004 saw a confluence of several phenomena that seem to be related via a series of strong theoretical linkages. Key among these are historically high levels of home-ownership and housing wealth, an extreme housing-price boom, a generously liberal credit regime, unanticipated levels of borrowing, the lowest interest rates in generations, massive consumption expenditures/dangerously low savings rates, general economic prosperity, and, a rising trend in bankruptcies and house possessions. The objective of this project is to highlight the linkage between housing wealth and consumption expenditures with special focus on the events of the last decade. Given the nature of macroeconomic linkages, it turns out that in order to study this relationship in the context of UK, it is necessary to tell an economic tale that incorporates all of the phenomena mentioned above. While there are rather straightforward theoretical reasons as to how and why the national housing wealth affects aggregate consumption, the historical and institutional realities of the financial industry, the changing consumer behavior with respect to credit, the evolving demography etc. have played an important role in shaping this relationship in the UK. Over two-thirds of UK households owned their home and it is typcially their biggest investment they make. At the aggregate level, housing wealth is now greater than the size of their financial holdings[3]) and it is distributed in a considerably more equitable manner across socioeconomic and demographic segments as compared to the latter. Such investments bring reasonable returns over the long term, and in the last five years house price appreciation has more than doubled the value of the stock. It follows, then, that changes in housing wealth have the potential, in theory, to have sizeable effects on consumption, GDP, unemployment etc. The theoretical mechanism by which changes in housing wealth are transmitted into consumer demand, called the ‘wealth effect’ (discussed in detail later in the paper), is of critical importance to the economy because its impulses also affect an array of other macroeconomic variables and processes. Clearly, the ability to draw on this major store of purchasing power has serious implications for the financial health and prosperity of homeowners and, hence, the economy. With respect to access to the ‘frozen’ housing equity, the UK experience has been uniquely successful as compared to those of almost all other OECD countries. A series of policy moves to deregulate and ‘liberalize’ lending practices resulted in democratizing the credit market such that loan products once provided to the privileged, became common-place. Households that had faced credit barriers could now affordably borrow large amounts thus unleashing the power of the wealth effect. Therefore, the ways in which UK households obtain and dispose off the equity is of particular interest to this study.[4] This paper is organized as follows: the next section lays out the key issues involved in this study; the third section discusses the theoretical and analytical matters concerning the wealth effect in the context of the recent UK housing boom; the fourth section surveys the empirical research in this area; the fifth section presents the empirical work done for the study, including a description of the findings from regression analysis using Microfit; and the last section offers some conclusions from the work. (There are graphs and figures associated with the text and they are appended at the end.) A Review of the Peculiar Issues and Macroeconomics of the UK Housing Market Nature of the boom With focus on the 1995-2004 period, this section lays out the key issues involved in understanding of the structure and strength of the relationship between housing wealth and consumption. At the outset it is necessary to have an overview of developments in UK’s housing market during the pertinent period to highlight the generation of housing wealth, the manner in which it is accessed in the form of equity, and channels of disbursement of the equity. The UK housing market became truly energized in the mid-to-late 1990’s, beginning with a property boom in the London area and then gradually spreading to virtually every region. Homeownership levels reached historic levels and so did the share of ‘buy-to-let’ residential investments in the country’s portfolio. Using data published by Halifax-Bank of Scotland, Graph 1 provides the salient market metrics: the price boom accelerated to push the price of the typical house from around  £61,000 in 1995 to over  £161,000 by 2004 – an increase of over 160%; not only was the speed and tenacity of housing prices unprecedented, the annualized percentage growth rate seem to rise with the level of prices. Far from being a localized phenomenon, this housing boom covered the entire UK, as Graph 2 demonstrates. While, the origin of the boom was in Greater London and the Southeast in the mid 1990’s, it quickly enveloped East Anglia and the Southwest. However, by 2001 the boom entered its most vigorous phase as it spread to the peripheral regions with prices almost doubling in a five-year period. Since most of the home purchases are financed through mortgages, the two variables that shape housing demand decisions are the interest rate and property prices. As it turned out, with historically low nominal lending rates (see discussion later), the home prices was the chief determinant behind purchases. The feeding frenzy that was the housing market pumped prices to such a level that placed typical accommodations out of reach of most would-be buyers. The Affordability Index, calculated as the ratio of housing prices to household disposable income, rose from 3.09 in 1995 to 5.45 in 2004. It is useful to note that higher aggregate housing wealth can be a product of a rise in housing prices and/or a growth in the stock of housing. As is displayed in Graph 3, the early 1980’s saw housing wealth grow due to a steady rise in prices while in the late 1980’s and early 1990’s we see stability in it despite declining prices. There was rising home ownership during all three intervals; in the early 1980’s it was engendered by the privatization of some public housing [5, p. 12] while the late 1980’s and early 1990’s it was due to stimulated demand spurred by declining prices and interest rates. With housing prices rising at around 20% per annum, vast slices of society saw the value of their homes reach unseen levels as the market injected equity. This store of equity was virtually a battery filled with purchasing power that was steadily getting charged by the market and that could be tapped into, if needed, to finance purchases. Halifax (2005) reports on it website that at the end of 2005, UK’s housing wealth reached a historic peak at  £3,408 billion which amounts to triple the figure in 1995 with the last five years seeing a 60% increase. As Graph 3 illustrates, since the mid-1990’s the unprecedented spurt in housing wealth can be attributed mainly to rising prices. Clearly, an index of housing prices is an excellent proxy for housing wealth. [5] What generated the price boom? As compared to the preceding 15 years, the last decade saw the housing market subjected to a variety of macroeconomic and financial forces. Following Her Majesty’s Treasury (2003) and Farlow (2004), one can identify demand- and supply-side factors responsible for shaping the current housing market. On the demand side, the key market forces were: According to Her Majesty’s Treasury (2003) the early 1980’s saw a sustained campaign of liberalization of the credit market that led to increased competition among banks and non-traditional lenders, rampant development of new credit products, and enhanced capacity of banks to create liquidity; all of which made obtaining housing loans easier and a more egalitarian process by lowering transaction costs. [6] Low and declining interest rates pushed down the cost of mortgage credit thereby stimulating housing demand; Macroeconomic prosperity with higher disposable income and lowered unemployment rates allowed for more purchasing power; Expectations of continuous expansion and future employment created an optimism among households Despite an ageing population, members of typical home-buying age-cohort (especially baby-boomers) saw their households grow, thus creating a greater demand for family housing; And lastly, the explosion in ‘buy-to-let’ purchases led to a massive speculative demand fueled by expectations of sustained housing price increases. On the supply side, the major market forces according to Farlow (2004) and Her Majesty’s Treasury (2003)were: a low price-elasticity of supply due to a combination of policy regulations, regional scarcity of land, and lags in obtaining licence/local approval; Scarcity of existing housing available for purchase i.e. low vacancy rate; Rising costs of construction, especially due to labour shortage and rising prices of materials. When a strong level of demand and a limited and inelastic housing supply are combined, one can see why prices have risen so quickly. Housing wealth vs. Financial Wealth To understand the rising significance of the recently acquired housing wealth, it is interesting to compare it with the ownership of financial assets in UK. Housing remains UK’s greatest asset with the total of shares, bonds, and cash amounting to  £1.6 trillion. In the past, financial assets pensions and holdings of shares, bonds, and bank accounts accounted for bulk of the nation’s wealth. However, recent history has created housing as the asset that is held more widely and equitably – across geographic regions, age cohorts, and income groups – than financial wealth. Pensions were clearly concentrated among the older age groups and the bulk of other financial assets were held largely by a small opulent minority. Data provided by National Statistics (www.statistics.gov.uk) and Her Majesty’s Treasury (2004) describe UK’s home ownership as widespread across all income and age categories with older segments having a larger rate. Whereas shares and bonds are owned largely by people in higher income groups – for obvious reasons – the housing boom has proved to be a moderating or equalizing force as all homeowners have benefited from rising property values.[7] The English Longitudinal Study of Ageing (2002) provides some supporting evidence in this respect. The study finds that because of the relatively even distribution of recent gains, housing wealth has become more important than non-pension financial wealth, especially in the 50+ age group. The following table shows that not only is the typical size of housing wealth ownership greater than net financial wealth (non-pension), but that it is far less concentrated across society as reflected by the lower inter-quartile ratio and lower Gini coefficient. Table 1. Net Housing Wealth approx. Net Financial Wealth – approx. Mean  £73,000  £44,000 Median  £52,000  £12,000 Inter-quartile ratio 5.14 69.3 Gini Coefficient 0.575 0.761 Source: English Longitudinal Study of Ageing (2002), IFS. The data shown in Graph 4 reveals though financial wealth had dominated all through the 1990’s, the rapid growth of housing wealth since the mid 1990’s coupled with the stock market bust has again placed the two neck and neck. Even with parity in value, the prominence that housing wealth commands in the national balance sheet is the consequence of its relatively equitable distribution and the fact that in spite of recent volatility in housing prices, it is historically far more reliable as an investment than the market value of corporate shares – the dominant component of financial assets. With growth in house prices outstripping the growth in mortgage debt, mortgage equity has increased from  £700 billion in 1995 to  £2.4 trillion at the end of 2005 – a 250% increase. In real terms, the last five years have seen the value of housing stock rise by over 60%. Thanks to housing values rising faster than mortgage debt in each of the last ten years, UK homeowners now have a greater financial buffer for leaner times. Ten years ago, the typical home was worth 2.8 times as much as the typical mortgage; at the end of 2005, this ratio had increased to 3.5, underlining the fact that the country has more equity than a decade ago. Tapping into housing wealth A survey of related literature from Bridges et al (2004), Davey (2001), Farlow (2004), Nickell (2004), and Salt and Macdonald (2004) reveals a variety of ways in households can access the equity stored in the residences. The manner in which a particular household harvests equity depends on the circumstances under which the action is taken. Table 2 below has categorized the possible scenarios. The table explains that households that continue to occupy their home can draw equity by re-mortgaging, i.e. borrow by treating their property as collateral. Households who move could access equity either by over-mortgaging the new home, or by buying a cheaper house in the new location, or by selling their house move to a rental unit (thereby liquidating their asset and obtaining the entire stock of equity). The last possibility covers cases where the owner id deceased or leaves the country, leading to the final sale of the house and the release of 100% of the equity. Table 2. Category of Homeowners Method of Extracting Equity Houseowners retaining possession Re-mortgaging: by taking out additional mortgage(s), borrowers could access equity up to a maximum percentage of value Houseowners that move Down-grading: these households move to a cheaper home, thereby harvesting the equity that equals the difference between the value of sale and the portion of mortgage that was owed Over-mortgaging: these households move to a new residence but manage to obtain a mortgage loan that exceeds the value of the new purchase. This typically occurs in regional markets where there is strong expectations of continuous property-value appreciation Final sale with return to rental: some households sell their houses in order to move to a rental property ostensibly due to either lack of affordability (those with diminished earnings) or convenience (mostly the elderly and the infirm) Households in which the owner(s) are deceased Final sale: when the owners dies, the property is sold with the receipts being used for purposes other than purchase of a house Having harvested the equity, how a given household’s chooses to allocate it across possible uses depends on a range of socio-economic and demographic factors like income level, family size, amount and composition of wealth, age(s) of the members, their geographical location, and even their ethnicity. The following section provides a detailed discussion of the conversion of equity into a specific one use – consumption. Housing wealth and the consumption function: Theory, Analysis, and UK Evidence In this section we begin with outlining the macroeconomic theory behind the consumption function with special reference to the wealth effect. The aim is to both explain the causal relationships behind the various ways in changes in the housing market can impact consumption as well as to identify the factors and circumstances under which the wealth effect might be weakened. The issues in this discussion are with explicit reference to the specific case of the UK. The original Keynesian consumption function was presented as: C = a + bYd(1) Where C denotes real consumption, ‘a’ is the autonomous consumption expenditures, ‘b’ is the parameter symbolizing the marginal propensity to consume (hereafter, mpc) that was postulated as being a constant fraction, and Yd the real disposable income. Shifts in the consumption function are considered as being caused by ‘shocks’ or changes in variables other than Yd. Given the historical period when Keynes first conceived this relationship, it is not surprising that income was the chief driver of consumer spending. Presumably, because wealth was highly concentrated within the aristocracy and credit was a privilege for the few, Keynes decided to lump all non-income influences on consumption into the autonomous term. Over time, with growing sophistication of macroeconomic theory and of market-based economies in general, the consumption function came to be recognized as the following general formulation: C = Æ’(Yd, Real Interest Rate, Price Level, Wealth, Expectations)(2) This explicitly recognized the influence of, among other variables, wealth on consumption decisions, i.e. the wealth effect. However, the formulation stuck with the original assumption of the mpc being constant. That, after all, was acceptable because Keynes’s thinking was anchored in short run considerations and the assumption of unchanging consumers’ sensitivity to income changes was consistent with the model. However, empirical testing of the formulation revealed that not only did the mpc vary with the length of time over which the estimation was conducted (it increased with time), but that its value tended to approach one. This certainly cast a cloud over the consumption function’s relevance and reliability in terms of explaining behaviour.[8] With new thinking about consumption expenditures and about the time-horizon over which a household’s economic decisions were made, two new theories emerged. The Life Cycle Hypothesis (LCH)[9] and the Permanent Income Hypothesis (PIH)[10] both began from the fundamentally un-Keynesian assumption that households make decisions based on their assessment of not only the present but also the anticipated or likely future circumstances. In addition, both also held that rational spending and hence saving decisions necessarily involved long term planning – plausibly for rainy days, growth in family size, and old age. According to Miller (1996) and Gordon (2003), the LCH assumes that permanent incomes are determined over the entire lifetime of the consumer, with allowance for a transitory element that depends on the consumer’s professional status. While the lifetime-oriented income could rise or fall in response to changes in productivity and unexpected events, consumption is smoothed and maintained at an even keel with dissaving (or borrowing) making up any shortfall in spending power. Similarly, in boom periods households save and accumulate purchasing power as wealth for future use. The long term level of income is assumed to follow a smooth path. Clearly, wealth plays a critical part in this model as the household accumulates savings in periods when smoothed consumption is below income. Similarly, as needed, wealth is accessed or made liquid for spending when planned consumption exceeds earnings.[11] The theoretical significance of the LCH – which forms the basis of much of the empirical research reviewed – is easy to see because the way it explicitly incorporates the wealth effect into the household’s lifetime decision horizon with respect consumption, it makes it convenient to model housing wealth. Like the stylized household in the model that begins income-earning phase of her life with modest income and some debt (incurred because of current consumption expenditures exceeding lifetime income), the typical new homeowner is relatively young with a mortgage debt that is several times her annual income and little in terms of savings. Over time, in the absence of tumultuous booms, population and income growth in the economy lead to a steady rise in property values and mortgage equity accumulates. With growing needs for durables, the homeowner then has the possibility of ‘cashing in’ some of the stored housing wealth when current income and savings prove inadequate, much in the same way as the theoretical consumer enters a life-phase during which dissaving takes place. The key idea here is that just like the accumulated housing equity is part of purchasing power for the lifetime, the consumption decision also cannot be inconsistent with a long term budgetary process. This model also suggests that there are periods (or life phases) in the household’s lifetime when wealth is accumulated and when it is used up in the form of consumption. This clearly defines when and under what circumstances mortgage equity is spent. For a young family that continues to occupy a house, the prime motivation is to accumulate equity and harvest it for emergencies or for planned increases in spending that are in balance with expected lifetime earnings which presumably are adjusted for the debt service associated with the additional mortgage. This scenario is consistent with, say, a home improvement project that allows for a larger or growing family or with purchase of durables for a similar purpose. For older homeowners who are approaching retirement or are actually retired, withdrawing equity is consistent with their position in the ‘life-cycle’. Since the income stream is either expected to end or has ended, spending decisions warrant the use of sa vings and/or mortgage equity withdrawals (MEW). Critical to this model is how it treats the rapidly accumulated wealth gains due to a market-driven housing price boom like UK just experienced. Analyzing the housing wealth effect in the context of the LCH, Bridges et al (2004) liken the rise in housing wealth to raising the household’s lifetime budget constraint. Assuming easy access to credit, they identify two pertinent theoretical relationships: one between housing price increases and the lifetime incomes of the wealthier households and the other between housing wealth and the newly acquired debt obligations of the re-mortgaging households. In theory, then, higher housing prices generate wealth effects depending on whether or not the price change is interpreted as permanent or temporary. If households perceive the gains to be permanent or unlikely to be reversed by a sudden housing bust (like what the UK witnessed in the 1980’s and early 1990’s), then it amounts a rise in lifetime income and higher consumpti on expenditures induced by it are ‘allowed.’ On the other hand if the price (and wealth) increases are due to random market activity and will most likely be followed by a decline, then the realized buildup of mortgage equity ought to be regarded as a temporary development and no serious consumption outlays need be planned to spend it. LCH holds that households that are pleasantly surprised by equity gains and choose to borrow against it for extravagance or pleasure spending are fully aware of the future debt-service implications and have made the necessary budgetary calculations that reveal that these actions related to the wealth-effect are compatible with their lifetime income. Curiously, O’Sullivan and Hogan (2003) report that Ireland also experienced a housing boom (though not as extreme as the one in UK), but that there were no signs of a wealth effect. This was presumably because Irish consumers did not put much faith in the housing market’s longevit y and construing the recent price gains as transitory, let the accumulated equity stay ‘frozen.’ However, it is possible that there were indeed impulses related to a housing wealth effect but simultaneously counteracting forces offset it, resulting in generally unchanged aggregate consumption.[12] The above discussion opens up three related and important issues: (i) the process by which accumulated housing wealth translates into consumption expenditure, i.e. the anatomy of the wealth effect in the housing context, (ii) the implications of multiple possible uses of MEW for the strength of the wealth effect, and (iii) other macroeconomic factors that can offset the wealth effect or perhaps prevent it from materializing. Anatomy of the Housing Wealth Effect There are two channels through which homeowners are able to raise their consumption via the wealth effect. As explained above, one way for homeowners to convert their housing wealth is by harvesting mortgage equity MEW. Table 2 outlined the variety of ways in which households obtain equity. Benito and Power (2004), Bridges et al (2004), and Davey (2001) provide insight into how MEW has become a major source of consumer financing in the UK. Graph 5 clearly shows the close relationship between housing prices and MEW[13]. Throughout the last three decades, except for the 2003-2004 interval, UK’s homeowners have reacted to the housing market’s wealth rewards. As Davey (2001) explains, MEW was relatively unimportant in the 1970’s but rose sharply in the following decade. In the early 1980’s despite a recession, MEW climbed because the period coincided with the privatization of public housing. The first half of 1990’s, however, saw a steep decline in hou seholds use of withdrawn equity.In fact there was a brief period when there was a net injection of equity into the housing stock. It could be argued that this was a reflection of a rational economic behaviour on the part of homeowners’ as they assessed a downward trend in housing prices as being detrimental to their long term finances. With a declining value of their housing wealth, UK’s homeowners cut back on withdrawals. Since the mid-1990’s price boom, that downward trend in MEW was quickly reversed. This period saw MEW grow faster than housing prices hinting at the possibility of a overly optimistic body of borrowers who expected housing prices and equity accumulation to continue rising at an ever increasing rate. Since at least part of the MEW is withdrawn by homeowners re-mortgaging their houses (see Table 2), this translates into loans secured by their properties. Halifax – BOS (2005) offer compelling evidence in this respect. They report that in 2 004, total gross lending secured by dwellings was an astronomical  £291 billion – 4% more than the previous year. The figure that was a mere  £57 billion in 1995, doubled by 1999 and with growth rates sometimes exceeding 35% had risen to five times that level in 2004. This monumental withdrawal can be interpreted as a major windfall for the homeowners who suddenly found themselves swimming in an ocean of purchasing power made available by the housing market. The other channel through which housing wealth engenders greater purchasing power in the hands of homeowners is comparatively subtle mechanism. Bridges et al (2004) discuss in great detail, how even without using their property s collateral, homeowners have gained access to ever rising amounts of unsecured credit. The rising value of housing wealth was interpreted by banks and other lenders as indicative of greater borrowing ability, i.e. greater creditworthiness. Naturally, this perception of the lenders was shaped, in part, by expectations of continuous a housing boom. A side implication of this phenomenon is that homeownership in the UK had become a screening device or filter for lenders’ decisions about whom to consider for loans. It follows that this would place renters at a disadvantage with respect to access to credit. Several studies, including Bridges at al (2004) have cited evidence of homeowners being supplied credit on terms far more favorable than those offered to non-owners. It can be reasonably expected that a large portion of the unsecured borrowing was directed toward consumption. Critical to both these channels is the issue of the ease with homeowners are able to obtain credit in lieu of their housing wealth. The mere existence of mortgage equity must be complemented with an efficient system to gain access to it for the wealth effect to take place. Benito (2004), Bridges et al (2004), and Her Majesty’s Treasury (2003) all stress that the liberalization of UK’s financial system that began in 1979 (see footnote 6 in Sec. 2) has been instrumental in creating a credit market that has facilitated the historic levels of MEW. With rising competition among banks and building societies and tremendous product innovation, the lending industry has created a series of affordable and accessible ways in which homeowners can obtain credit. All three studies portray the boom in housing prices and MEW in the UK as unique as compared to all other OECD economies. The coincidence of rising housing prices created huge reserves of withdrawable mortgage equity and supply-side changes in the form of lower restrictions on lending practices and other financial reform is responsible for the explosion in MEW sin

Analysis and Treatment of Hunter S. Thompson for Substance Use Disorder

Hunter S. Thompson once said, â€Å"I hate to advocate drugs, alcohol, violence, or insanity to anyone, but they’ve always worked for me.† There are no other words that would describe Dr. Thompson in a more accurate fashion. He lived his life like no other human being could ever imagine. He is arguably the most famous and creative writer to have lived, especially considering that he was the one who created the new style of writing that is referred to as â€Å"Gonzo† writing. He was the eye of a culture movement that left a significant impact on society’s perspective overall. Hunter was raised in a household that was below of average wealth; all while his friends were from the other side of town with considerable more wealth. His father passed away when he was at the age of 14, forcing his mother who was a heavy alcoholic to raise him and his brothers. His mother never had a grip on him allowing him to do as he pleased with no remorse. He was a child from hell that was continuously getting into mischief, whether it be vandalism, violence, pranks, theft, underage drinking, and just stirring up about anything he could. During his final days of being a senior in high school, he and two friends were arrested for theft. He was left in the jail system, while his two friends were released on the sole basis that they came from a family of wealth. He had the choice of staying in jail or joining the United States Air force, which he chose to serve his country. The one thing that Hunter really had a passion for was writing, in which he started at a young age and would continue to further develop his very own unique style of writing. His style of writing was non-traditional that went against every rule of journalism. It was a subjective form that ... ..., NSW: Centre for Parenting and Research Carter, G. & Gibney, A. (2008). Gonzo: The life and works of Dr. Hunter S. Thompson. United States: Mognolia Home Entertainment Studio. Higgins, C. (2013). Hunter S. Thompson’s daily routine. Mental_Floss, l. Hunter Stockton Thompson. (2013). The Biography Channel Website. Retreieved 6:39, Nov. 13, 2013. From Kring, M.A., Johnson, L.S., Davison, G., & Neale, J. (2012). Abnormal psychology. Danvers, MA: Wiley, John & Sons, Inc. Michael, S. (2010). The stress diathesis model of addiction. Psychneuro. Paulsen, O. & Moser, El. (1998). A model of hippocampal memory encoding and retrieval: GABAergic control of synaptic plasticity. Trends Neuroscience, 21, 273-278. Perkins, D. Lecture presented at Ball State University, Muncie, IN. (October 2013). Tucher, A. (2000). Thompson, Hunter S. American National Biography Online.