Diffusion weighted (DW) Magnetic Resonance Imaging MRI Essay

Diffusion weighted (DW) Magnetic Resonance Imaging MRI - Essay Example The exploration of diffusion in MRI includes the way MRI is sensitized to diffusion; the effects of spins, both stationary and moving spins; how diffusion-weighted images are affected by physiological motion; the how of the achievement of the various diffusion weightings; and information on diffusion and how those are measured (Hagmann et al. 2006; Mori and Barker 1999, pp. 102-106; Tonarelli 2012; Parker 2004, pp. S176-S178; Everdingen et al. 1998; Barker 1999; Maas 2005; Le Bihan et al. 2006; Yablonskiy et al. 2003; Koh and Collins 2007; Le Bihan 2011; Basser and Jones 2002; Battal et al. 2012; De Foer 2010; Luypaert et al. 2001; Williams et al. 1992; Topgaard 2006) II. Background on Diffusion Diffusion on the molecular level is said to be the result of natural Brownian movement, where molecules randomly move through the diffusion medium because of the agitation caused by thermal characteristics of the medium. In all the displacement of the molecules comes up to zero by mean figure s, but over time, there are positive probabilities associated with the non-zero movement of a molecule, so that over time, a molecule is said to probably have moved from an initial position at an earlier time. Here the time elapsed corresponds to a correlation with the distance moved, where different fluids acting as diffusion mediums determine the distance as characterized by the diffusion constant for that liquid type. There is a difference between the freely diffusing movement of water molecules, meanwhile, to the diffusion of liquids in the tissues of human beings, so that in human tissues one talks of an ADC, or an apparent diffusion coefficient, to be differentiated from the free diffusion coefficients of liquids outside of human bodies, such as those used to characterize water in containers at certain temperatures. On the other hand, for human tissues, various considerations further come into play, such as differences in the mobility of different fluids in different parts of the body and in different parts of a particular organ, such as the human brain. Boundary conditions also differ for liquids found in different body parts. All these affect the coefficient of diffusion in various ways, with the general observation that the ADC is generally smaller in comparison to the free diffusion coefficients of liquids like water outside of the human body (Luypaert et al. 2001; Roberts and Rowley 2003). Going into diffusion types, meanwhile, there are two, one being isotropic diffusion and the other being anisotropic diffusion. In isotropic diffusion, the rate of diffusion is the same in all directions, and so the resulting diffusion distribution is spherical. In anisotropic diffusion, the diffusion rate depends on where the diffusion is oriented, and there is uneven diffusion in different directions. The distance of the diffusion is orientation-dependent, in other words, and the diffusion distribution is characterized by an ellipsoid (Module 1 2013). III. MRI an d Diffusion A. How MRI is Sensitized to Diffusion In a hypothetical case, the typical distribution of displacement of water molecules in such a container is said to follow a bell curve, with majority of the water molecules able to travel only for short distances from their initial location, whereas a few of the water molecules are able to be displaced at further distances from average. For a given initial temperature of the water, moreover,

Research paper Example | Topics and Well Written Essays - 2000 words - 1

Research Paper Example Generally, for along time product design has been the concern of most scholars in all fields and more so in the development of computer information products. Product design involves aspects of making and coming up with products, events processes as well as services based on the user experience and add quality to the user. It also takes into consideration the immediate environment in order to identify and solve certain problems. It is with this view that emotional appreciation of an event process or product goes along way in improving the quality as well as the usage of the same (Norman, 2004). In my opinion, when people are more enthusiastic about a product designed they are likely to appreciate the product and in the event talk good about it. Through such those developing the product also look at ways of improving it. Through appreciation of the aesthetic and visceral aspects of products it creates emotional satisfaction as well as encourages association with the product (Kausler, a nd Trapp, 1960). In the market this aesthetic appreciation helps in marketing as more of the product is sold more and more. Emotional appreciation during product design has been also argued that it encourages integration of theories and concepts that are vital in the final development of product. In the companies this has also been seen to result to hard work and dedication as people become more attached to the designs they produce and emotionally feel good about their work. So anyone who has an experience of the products either directly or through the website appreciate this aspects of product design and become emotionally attached to it which therefore spreads to family members ,professionals as well as the media in general. Therefore it becomes very important to look at these aspects of aesthetics in the design of any product. Q2. The philosopher's tool kit II (Wittkower) In his attempt to examine the philosophical aspects of iPod mobile audio player, Wittkower (2008) uses 19 cha pters written by different authors and philosophers on how iPod is changing the lives of individuals and their sense of community. The philosopher’s toolkit is a comic philosophical thought and methods book as well as a novel. This novel have several chapters with latest revision of philosophical writing making this book further good for the readers understanding of its concepts. This book has six chapters and presents instances of certain kind of philosophical tool in each of them. Chapter one of these books jerks mouldy aptly by unfolding the position of influences in viewpoint. This chapter goes on and discuses several peripheral philosophies example of these being the difference between explanation and reasoning. This seems to be confusing and irrelevant to some extent. This chapter points out how inappropriate logically valid advices might seem to the layman. Finally the chapter explains that the structure of fight regulates its validity and resolutions the pressure by f amiliarizing the position of truth for the discussion. In chapter two, the hypothetical-deductive technique is categorized though it looks to be perplexing. It says that the result of the trial may in the sturdiest case prove or criticize the thesis. In feebler cases the outcome might offer proof for or against this thesis as well. With HD technique one can prove the truth of a concept; this is even well elucidated in the next chapter. In another contrasting example, the pass of reduction to some

Reproductive Health Choices For Young Adults with Sickle Cell Disease Essay

Reproductive Health Choices For Young Adults with Sickle Cell Disease or Trait - Essay Example The evidence level of the abstract is III. It is because the research has been conducted from gathering evidences from the case, correlation and comparative studies. The study makes use of the different recognized, experts, peer reviewed and case studies comparison. It is difficult to identify the purpose of the study. However, the problem statement is detailed but the objective of the study still remains blurred and unclear. It seems that the article talks more about the awareness of the issues through the assistance of eBooks rather than emphasizing on the main objective of the issue. The problem statement has not been clarified defined due to which the objective of the research has been blurred. It talks more about the comparison of the intervention and its comparison with the usual care. However, it does not brief well about the main objective of the study aims to attain through the comparison of the intervention but is focuses on the knowledge, intention and behaviors. As the purpose statement of the research has been blurred the research question of the study are also weak. The research does not clearly define the research question, the wording and the sentence of the research question have been merged within the paragraph that makes the research question not clear. The research question for the study is ‘We now report pretest and immediate post-test findings from a randomized controlled trail of the CHOICES intervention for young adults with SCD or SCT’. It shall be noted that the objective of the research question is blurred and does not clarify specify the objective it aims to attain through this research. Yes, the hypothesis is present in the article. The hypothesis for the study is ‘compared with the usual care group, the CHOICES group would report increased reproductive health knowledge, intention, and planned behavior changes consistent with their parenting plan, when pretest scores were controlled’. It is a

Research Paper About Education Essay Example for Free

Research Paper About Education Essay Etymologically, the word education is derived from the Latin Ä“ducÄ tiÃ…  (â€Å"A breeding, a bringing up, a rearing) from Ä“dÃ… «cÃ…  (â€Å"I educate, I train†) which is related to the homonym Ä“dÃ… «cÃ…  (â€Å"I lead forth, I take out; I raise up, I erect†) from Ä“- (â€Å"from, out of†) and dÃ… «cÃ…  (â€Å"I lead, I conduct†).[2] The role of government A right to education has been created and recognized by some jurisdictions: Since 1952, Article 2 of the first Protocol to the European Convention on Human Rights obliges all signatory parties to guarantee the right to education. It does not however guarantee any particular level of education of any particular quality.[3] At the global level, the United Nations International Covenant on Economic, Social and Cultural Rights of 1966 guarantees this right under its Article 13.[4] Throughout history various governments have made it illegal to educate children privately or at home. Various totalitarian regimes, for example, have mandated indoctrination through propaganda in the Hitler Youth and propaganda in education under various communist regimes. Systems School children line, in Kerala, India Systems of schooling involve institutionalized teaching and learning in relation to a curriculum, which itself is established according to a predetermined purpose of the schools in the system. Schools systems are sometimes also based on religions, giving them different curricula. Curriculum Main articles: Curriculum, Curriculum theory, and List of academic disciplines School children in Durban, South Africa. In formal education, a curriculum is the set of courses and their content offered at a school or university. As an idea, curriculum stems from the Latin word for race course, referring to the course of deeds and experiences through which children grow to become mature adults. A curriculum is prescriptive, and is based on a more general syllabus which merely specifies what topics must be understood and to what level to achieve a particular grade or standard. An academic discipline is a branch of knowledge which is formally taught, either at the university–or via some other such method. Each discipline usually has several sub-disciplines or branches, and distinguishing lines are often both arbitrary and ambiguous. Examples of broad areas of academic disciplines include the natural sciences, mathematics, computer science, social sciences, humanities and applied sciences.[5] Educational institutions may incorporate fine arts as part of K-12 grade curricula or within majors at coll eges and universities as electives. The various types of fine arts are music, dance, and theater.[6] Preschools Main article: Preschool education The term preschool refers to a school for children who are not old enough to attend kindergarten. It is a nursery school. Preschool education is important because it can give a child the edge in a competitive world and education climate.[citation needed] While children who do not receive the fundamentals during their preschool years will be taught the alphabet, counting, shapes and colors and designs when they begin their formal education they will be behind the children who already possess that knowledge. The true purpose behind kindergarten is â€Å"to provide a child-centered, preschool curriculum for three to seven year old children that aimed at unfolding the child’s physical, intellectual, and moral nature with balanced emphasis on each of them.†[7] Primary schools Main article: Primary education Primary school in open air. Teacher (priest) with class from the outskirts of Bucharest, around 1842. Primary (or elementary) education consists of the first 5–7 years of formal, structured education. In general, primary education consists of six or eight years of schooling starting at the age of five or six, although this varies between, and sometimes within, countries. Globally, around 89% of primary-age children are enrolled in primary education, and this proportion is rising.[8] Under the Education For All programs driven by UNESCO, most countries have committed to achieving universal enrollment in primary education by 2015, and in many countries, it is compulsory for children to receive primary education. The division between primary and secondary education is somewhat arbitrary, but it generally occurs at about eleven or twelve years of age. Some education systems have separate middle schools, with the transition to the final stage of secondary education taking place at around the age of fourteen. Schools that provide primary education, are mostly referred to as primary schools. Primary schools in these countries are often subdivided into infant schools and junior school. In India, compulsory education spans over twelve years, out of which children receive elementary education for 8 years. Elementary schooling consists of five years of primary schooling and 3 years of upper primary schooling. Various states in the republic of India provide 12 years of compulsory school education based on national curriculum framework designed by the National Council of Educational Research and Training. Secondary schools Main article: Secondary education Students working with a teacher at Albany Senior High School, New Zealand Students in a classroom at Samdach Euv High School, Cambodia In most contemporary educational systems of the world, secondary education comprises the formal education that occurs during adolescence. It is characterized by transition from the typically compulsory, comprehensive primary education for minors, to the optional, selective tertiary, post-secondary, or higher education (e.g. university, vocational school) for adults. Depending on the system, schools for this period, or a part of it, may be called secondary or high schools, gymnasiums, lyceums, middle schools, colleges, or vocational schools. The exact meaning of any of these terms varies from one system to another. The exact boundary between primary and secondary education also varies from country to country and even within them, but is generally around the seventh to the tenth year of schooling. Secondary education occurs mainly during the teenage years. In the United States, Canada and Australia primary and secondary educa tion together are sometimes referred to as K-12 education, and in New Zealand Year 1–13 is used. The purpose of secondary education can be to give common knowledge, to prepare for higher education or to train directly in a profession. The emergence of secondary education in the United States did not happen until 1910, caused by the rise in big businesses and technological advances in factories (for instance, the emergence of electrification), that required skilled workers. In order to meet this new job demand, high schools were created, with a curriculum focused on practical job skills that would better prepare students for white collar or skilled blue collar work. This proved to be beneficial for both employers and employees, for the improvement in human capital caused employees to become more efficient, which lowered costs for the employer, and skilled employees received a higher wage than employees with just primary educational attainment. In Europe, grammar schools or academies date from as early as the 16th century, in the form of public schools, fee-paying schools, or charitable educational foundations, which themselves have an even longer history. MLC Kx12 in Portland, Oregon Autodidacticism Main article: Autodidacticism Autodidacticism (also autodidactism) is self-directed learning that is related to but different from informal learning. In a sense, autodidacticism is learning on your own or by yourself, and an autodidact is a self-teacher. Autodidacticism is a contemplative, absorbing process. Some autodidacts spend a great deal of time reviewing the resources of libraries and educational websites. One may become an autodidact at nearly any point in ones life. While some may have been informed in a conventional manner in a particular field, they may choose to inform themselves in other, often unrelated areas. Notable autodidacts include Abraham Lincoln (U.S. president), Srinivasa Ramanujan (mathematician), Michael Faraday (chemist and physicist), Charles Darwin (naturalist), Thomas Alva Edison (inventor), Tadao Ando (architect), George Bernard Shaw (playwright), and Leonardo da Vinci (engineer, scientist, mathematician). Vocational Main article: Vocational education Vocational education is a form of education focused on direct and practical training for a specific trade or craft. Vocational education may come in the form of an apprenticeship or internship as well as institutions teaching courses such as carpentry, agriculture, engineering, medicine, architecture and the arts. ]Indigenous Main article: Indigenous education Indigenous education refers to the inclusion of indigenous knowledge, models, methods and content within formal and non-formal educational systems. Often in a post-colonial context, the growing recognition and use of indigenous education methods can be a response to the erosion and loss of indigenous knowledge and language through the processes of colonialism. Furthermore, it can enable indigenous communities to â€Å"reclaim and revalue their languages and cultures, and in so doing, improve the educational success of indigenous students.†[9]

Management and Sm Essay Example for Free

Management and Sm Essay Answer : yes its will get long time strategy and its will be from 1 year up 3 year maybe its be long time strategy until the clear and understand about the policy and situation of this SM (mamp;M) believe in determinism, that is, the choices they make are determined by their internal and external environments, are proactive, shape ideas, and change the way people think about what is desirable, possible, and necessary more willing to invest in innovation, human capital, and creating and maintaining an effective culture to ensure long-term viability focus on tacit knowledge and develop strategies as communal forms of tacit knowledge that promote enactment of a vision, see themselves as conservators and regulators of existing order; sense of who they are depends on their role in organization Note :Recent reports indicate the continued preference of Ramalingam Rajus style of management by the old employees of Satyam and the fact that such employees feel that they are being managed by out siders. It is also rumored that it is these employees who are now trying to switch their jobs. Of course, the SM management is doing its best to win over such employees and is taking pro-active steps to dissipate such rumors. 2. What HR strategy would you recommend for SM to inculcate a sense of belongingness, loyalty and improved performance of its employees? Answer: * The Sm its very important role is playing for the improve of loyalty of employees and performance of employees, * The SM its master the competence of sm ,which discuses methodologies of tolerating and managing stress one needs to climb which are stress tolerance and impulse controls ,respectively . Focus on corporate strategy, and try to pinpoint at least three goals of the strategy as stated by upper-level management. Create human resource performance indicators that are closely tied to the strategy objectives for the organization. Focus on both short- and long-term strategy objectives. For instance, suppose if its has SM . Theres a strong link between experience and education in terms of employee performance , Figure out how management measures strategy implementation. Connect the human resource performance goals to managements measurement. The sales staff or the employees that interface directly with customers are usually the easiest to measure in terms of performance. This may be an ideal group to measure. Track the connection between strategic management goals and human resource performance goals, and try to identify trends in human resource actions/strategy and the overall corporate strategy. It is important to be able to link the connection using the same measurement criteria as management to improve the SM . short-term performance of a business and its underlying health—that is, involved in situations and contexts characteristic of day-to-day activities, its ability to sustain and improve performance year after year after year. They also may need to manage their companies differently. view work as an enabling process involving some combination of ideas and people interacting to establish strategies

Study on Monetary Policy and the Stock Market

Study on Monetary Policy and the Stock Market Monetary policy is the regulation of the interest rate and money supply of a country by its Central Bank or Federal Reserve in other to achieve the major economic goals which include price stability, full employment, economic growth etc.  Ã‚   The stock market on the other hand is often considered a primary indicator of a countrys economic strength and development as it is a major source of savings and income for most individuals. History has shown that the economy of any country reacts strongly to movements in stock prices and is replete with examples in which large swings in stock, housing and exchange rate markets coincided with prolonged booms and busts (Cecchetti, Genberg, Lipsky and Wadhwani, 2000). Recent happenings even confirm this as the latest economic recession was preceded by a crash in the stock market. As a result of the relationship between the stock market and the economy, it is very important to the Central bank that the stock market performs well as bad performance can seriously disrupt the economy. This is because the stock market serves as a primary source of income and retirement savings to many and movements in stock prices can have a major effect on the economy as it influences real activities such as consumption, investments, savings etc While some economists say that monetary policy decisions depend on stock price movements, some others believe that stock price movements depend on monetary policy decisions. In this paper, we analyze both sides of the coin by looking at how stock markets react to monetary policy and how monetary policy reacts to movements in stock markets. This research work is aimed at finding out which granger causes which using the Granger Causality test. We will also analyze the relationship between both interest rates and monetary policy and that between money supply and monetary policy. In section II, a thorough review of the relevant literature of the topic is carried out as we try to understand more about the relationship between monetary policy and the stock market and the effects of both components (money supply and interest rates) of monetary policy 0n the stock market. In the next section, we describe the variables and data set used in the study and the empirical model is developed. Results are presented and discussed in the next section. We conclude the paper in section V and suggestions for further studies are pointed out and policy implications are considered. REVIEW OF RELEVANT LITERATURE Monetary policy is one of the most effective tools a Central Bank has at its disposal (Maskay, 2007) and is used to achieve the macroeconomic goals set by the government. This is done by regulating the two components of monetary policy which are interest rates and money supply to maintain balance in the economy. The stock market is an important indicator of the wellbeing of the economy as stock prices reflect whether the economy is doing well or not. Movements in stock prices have a significant impact on the macroeconomy and are therefore likely to be an important factor in the determination of monetary policy (Rigobon and Sack, 2001). The stock market is a financial market where equities are bought and sold either as an IPO (Initial Public Offer) in the primary market or exchange of existing shares between interested parties in the secondary market. Although stocks are claims on real assets and researchers have found considerable evidence that monetary policy can affect real stock p rices in the short run (e.g Bernanke and Kuttner, 2005), monetary neutrality implies that monetary policy should not affect real stock prices in the long run (Bordo, Dueker and Wheelock, 2007). To understand the relationship between monetary policy and the stock market, we must first understand what monetary policy is. Lamont, Polk and Saa-Requejo (2001), Perez-Quiros and Timmerman (2000) among others use change in market interest rates or official rates as their measures of monetary policy. This measure of monetary policy, however, coincides with changes in business cycle conditions and other relevant economic variables. Christiano, Eichenbaum and Evans (1994) extracted monetary policy as the orthogonalized innovations from VAR models proposed by Campbell (1991) and Campbell and Ammer (1993). Research methodology based on this has shown that the response of US stocks returns to monetary policy shocks based on federal fun rates show that returns of large firms react less strongly than those of small firms (Thorbecke, 1997), that the overall policy for stock returns is quite low ( Patelis, 1997) and that international stock markets react to both to changes in their local mon etary policies and that of the United states ( Conover, Jensen and Johnson ( 1999). Monetary policy shocks that are extracted from structural VAR models or from changes in interest rates using monthly or quarterly data are likely to subject to the endogeneity problem i.e they are unlikely to be purely exogenous ( Ehrmann and Fratzscher, 2004). Another VAR-based method was used by Goto ad Valkanov (2000) to focus on the covariance between inflation and stock returns while Boyd, Jagan and Hu (2001) considered the linkages between policy and stock prices. Their analysis did not focus directly on monetary policy; rather it focused on markets response to employment news (Bernanke and Kuttner, 2005). In their own research paper, Ehrmann and Fratzscher (2004) find that SP 500 shows a strong effect of monetary policy on equity returns, that the effect of monetary policy is stronger in an environment of increased market uncertainty, that that negative surprises ( i.e monetary policy has tightened less and loosened more than expected) has larger effects on the stock market than positive surprises, that small firms are react more to policy shocks than large firms, that firms with low cash flows are affected more by US monetary shocks and that firms with poor ratings are more prone to monetary policy shocks than those with good ratings. They find that firms react more strongly when no change had been expected, when there is a directional change in the monetary policy stance and during periods of high market uncertainty. There has also been cross-sectional dimensions of the effect of monetary policy on the stock markets in literature though few. Hayo and Uhlenbruck (2000), Dedola and Lippi (2000), Peersman and Smets ( 2002), Ganley and Salmon (1997) etc are some economists who have analyzed this and overall, their findings show that the stock prices of firms in cyclical industries, capital-intensive industries and industries that are relatively open to trade are affected more strongly by monetary policy shocks (Ehrmann and Fratzscher, 2004). According to Bernanke and Kuttner (2005), changes in monetary policy are transmitted through the stock market via changes in the values of private portfolios (â‚ ¬Ã…“wealth effectâ‚ ¬?), changes in the cost of capital and by other mechanisms. In their paper, they analyzed the stock markets response to policy actions both in the aggregate and at the level of industrys portfolios and they also tried to understand the reasons for the stock markets response. Their findings show that monetary policy is, for the most part, not directly attributable to policys effects on the real interest rate instead it seems to come either through its effects on expected future excess returns or expected future dividends. While economists commonly associate restrictive/expansive monetary policy with higher/lower levels of economic activity, financial economists discuss various reasons why changes in the discount rate affect stock returns. (Durham, 2000) Changes in the discount rate affect the expectations of corporate profitability ( Waud, 1970) and discrete policy rate changes influence forecasts of market determined interest rates and the equity cost of capital ( Durham, 2000). Modigliani (1971), suggests that a decrease in interest rates boosts stock prices and therefore financial wealth and lifetime resources, which in turn raises consumption through the welfare effect. Mishkin (1977) on the other hand suggests that lower interest rates increase stock prices and therefore decrease the likelihood of financial distress, leading to increased consumer durable expenditure as consumer liquidity concerns abate (Durham, 2000). Tobins q is the equity market value of a firm divided by its book value. It can also be defined as the ratio of the market value of a firms existing shares to the replacement cost of the firms physical assets. Higher stock prices reduce the yield on stocks and reduce the cost of financing investment spending through equity issuance (Bosworth, 1975). Tobins q explains on e of the mechanisms through which movements in stock prices can affect the economy: the wealth channel. The other channels of monetary policy transmission include; the interest rate channel and the exchange rate channel. The wealth channel has the investment effect, wealth effects and balance sheet effects (www.oenb.at/en). Bernanke and Blinder (1992) and Kashyap, Stein and Wilcox (1993) show that a tightening of monetary policy has a very strong impact on firms that highly depend on banks loans to financing their investments as banks reduce their overall supply of credit. Deteriorating market conditions affect firms by also weakening their balance sheets as the present value of collateral falls with rising interest rates and that this effect can be stronger for some firms than for others (Bernanke and Gertler 1989, Kiyotaki and Moore 1997). These two arguments are based on information asymmetries as firms for which more information is publicly available may find it easier to collect loans when credit conditions become tighter (Gertler and Hubbard 1988, Gertler and Gilchrist 1994).Stock returns of small firms generally respond more to monetary policy than those of large firms ( Thorbecke 1997, Perez-Quiros and Timmermmann 2000). Some economists (Sprinkle (1964), Homa and Jaffee (1971), Hamburger and Kochin (1972)) in the early 1970,s alleged that past data on money supply could be used to predict future stock returns. These finding where not in line with the efficient market hypothesis which states that all available information should be reflected in current prices (Fama, 1970) meaning that anticipated information should not have any effect on current stock prices. Most economists believe that stock prices react differently to the anticipated and unanticipated effects of monetary policy ( Maskay, 2007). The Keynesian economists argue that there is a negative relationship between stock prices and money supply whereas real activity theorists argue that the relationship between the two variables is positive (Sellin, 2001). The Keynesian economists believe that a change in money supply or interest rates will affect stock prices only if the change in the money supply alters expectations about future monetary policy while the real activity economists argue that increase in money supply means that money demand is increasing in anticipation of increase in economic activity (Maskay, 2007). Another factor discussed by Sellin (2001) is the risk premium hypothesis proposed by Cornell i.e higher money supply indicates higher money demand and higher money demand suggests increased risk which leads investors to demand higher risk premiums for holding stocks making them less attractive. The real activity and risk premium hypothesis is combined by Bernanke and Kuttner (2005) who argue that the price of a stock is a function of the present value of future returns and the perceived risk in holding the stock. While advocates of the efficient market hypothesis hold that all available information is included in the price of a stock, the opponents argue otherwise and that stock prices can also be affected by unanticipated changes in money (Corrado and Jordan, 2005). The effect of anticipated and unanticipated changes in money supply on stock prices was analyzed by Sorensen (1982) who found out that unanticipated changes in money supply have a larger impact on the stock market than anticipated changes. Bernanke and Kuttner (2005) on the other hand analyze the impact of announced and unannounced changes in the federal funds rate and find that the stock market reacts more to unannounced changes than to announced changes in the federal funds rate which is also in line with the efficient market hypothesis. Studies by Husain and Mahmood (1999) have opposing results. They analyze the relationship between the money supply and changes (long run and short run) in stock market prices and find that chan ges in money supply causes changes in stock prices both in the short run and long run implying that the efficient market hypothesis does not always hold. Maskay(2007) analyzes the relationship between money supply and stock prices. He also seperates money supply into anticipated and unanticipated components and adds consumer confidence, real GDP and unemployment rate as control variables. The result from his analysis shows that there is a positive relationship between changes in the money supply and the stock prices thereby supporting the real activity the theorists. The result from his analysis on the effect of anticipated and unanticipated change in the money supply on stock market prices shows that anticipated changes in money supply matters more than unanticipated changes. This supports the critics of the efficient market hypothesis. According to Cecchetti, et al. (2000), macroeconomic performance can be improved if the central bank increases the short-term nominal interest rate in response to temporary â‚ ¬Ã…“bubble shocksâ‚ ¬? that raise the stock price index above the value implied by economic fundamentals. On the other hand, Bernanke and Gertler (2001) assumed in their research that the Central Bank cannot tell whether an increase in stock prices is driven by a bubble shock or a fundamental shock. This study will analyze both exogenous and endogenous components of the relationship between monetary policy and the stock market i.e the effect of monetary policy on the stock market and the the effect if any of the stock market on monetary policy decisions. This particular analysis will be done using the federal funds rate as a representative of monetary policy. We also follow the methodology used by Maskay (2007) closely as we try to find the effect of money supply on the stock market. Although Maskay used M2 as a measure of money supply, this study will separate money supply into M1 and M2 and analyze their relationship with the stock prices. Following from the theory and review of literature, this paper is aimed at answering the following questions: How do movements in the stock market affect monetary policy decisions on federal funds rates? How does monetary policy affect stock market prices? Do stock market prices react differently to the M1 and M2 components of money supply? RESEARCH METHODOLOGY The effect of stock market prices on monetary policy. In this section, I test for the relationship between monetary policy and stock prices using the Taylor rule. The Taylor rule is a monetary policy rule that stipulates how much the central bank would or should change the nominal interest rate in response to the divergence of actual inflation rates from target inflation rates and of actual GDP from potential GDP. The rule is written as; it = r*t + ÃŽÂ ² (à Ã¢â€š ¬ tâ‚ ¬Ã¢â‚¬Å" à Ã¢â€š ¬*t) +ÃŽÂ ³ (yt Ã…Â ·t)â‚ ¬Ã‚ ¦Ã¢â€š ¬Ã‚ ¦Ã¢â€š ¬Ã‚ ¦.. (1) Where; it = target short-term nominal interest rate. r*t = assumed equilibrium real interest rate. à Ã¢â€š ¬t = the observed rate of inflation. à Ã¢â€š ¬*t = the desired rate of inflation. yt = the logarithm of real GDP. Ã…Â ·t = the potential output. But, to analyze the behavior of monetary policy, the following regression equation is estimated; it = ÃŽÂ ± + ÃŽÂ ²Et(à Ã¢â€š ¬ t+iâ‚ ¬Ã¢â‚¬Å" à Ã¢â€š ¬*t+i) +ÃŽÂ ³Et (yt+i+ Ã…Â ·t+i)+ÃŽÂ µt â‚ ¬Ã‚ ¦Ã¢â€š ¬Ã‚ ¦Ã¢â€š ¬Ã‚ ¦..(2) Where: Et = the expected value conditional to information available at the time. A good conduct of monetary policy should have ÃŽÂ ² and ÃŽÂ ± each equal to 0.5 as suggested by John Taylor. To conduct our study, we use the following equation; it = ÃŽÂ ± + ÃŽÂ ²Et(à Ã¢â€š ¬ t+iâ‚ ¬Ã¢â‚¬Å" à Ã¢â€š ¬*t+i) +ÃŽÂ ³Et (yt+i+ Ã…Â ·t+i)+ˆ‘Π´k à Ã¢â‚¬ ¦t-k + ÃŽÂ µt ..(3) Because the monetary authorities target variables other than inflation and output deviations from the target (asset prices in this case) thereby making equation (2) mis-specified. A standard Taylor rule is well specified when the monetary authorities target only inflation and output deviations from the target. The addition to this variable is the lagged change in asset prices which is added in order to determine the relationship between monetary policy and stock prices. The data for the CPI (Consumer Price Index), real GDP (Gross Domestic Product) and the federal funds rate are obtained from the IMF Washington website while the data for SP 500 Index are obtained from the Federal Reserve Economic Data (FRED) of the Federal Reserve Bank of St Louis website; www.federalreserve.gov. The effect of monetary policy on stock market prices. In this section, we test whether movements in stock prices are sometimes dependent on monetary policy. This test is carried out by regressing the actual change in federal funds rates upon the SP 500 index. We us the following simple model for this purpose: SP500 = ÃŽÂ ²1 + ÃŽÂ ²2*actual change in federal funs rate + ÃŽÂ ²3*real GDP + ÃŽÂ ²4* unemployment rate. Real GDP and Unemployment rate are added as control variables. The data for real GDP is obtained from IMF, Washington while the data for unemployment rates in obtained from www.federalreserves.gov. We add GDP because it is an important determinant of the stock prices as most industries react to changes in the economy and do well as the economy does well and vice versa i.e they are procyclical in nature. When the GDP is low, the stock prices generally tend to be low, as the companys performance would be worse than before. A direct, positive relationship is expected between stock prices and the GDP. Unemployment rate is also used as a control variable in this model because it is one of the major factors that determines the demand for stocks thereby either driving the stock prices up or down. When the unemployment rate is high, demand for stock reduces as less people can afford to buy them and this subsequently drives down stock prices and vice versa. The unemployment rate is also a proxy for for overall aggregate demand in the economy ( Maskay, 2007) and when it is low, aggregate demand is high. We expect an inverse relationship between the unemployment rates and stock prices. The effect of M1 and M2 components of money supply on stock prices. In this section, we test the relationship between monetary policy and stock prices from the money supply angle of monetary policy. We use the M1 and M2 components of money supply for this analysis. This is done by first testing the relationship between the percentage change in M1 and the stock prices and then testing the relationship between M2 and the stock market. The simple empirical model used for this test is; SP500 = ÃŽÂ ²1 + ÃŽÂ ²2*%ˆâ€  M1 + ÃŽÂ ²3*Real GDP + ÃŽÂ ²4*Unemployment rateâ‚ ¬Ã‚ ¦Ã¢â€š ¬Ã‚ ¦Ã¢â€š ¬Ã‚ ¦Ã¢â€š ¬Ã‚ ¦.. (1) SP500 = ÃŽÂ ² 1+ ÃŽÂ ²2*%ˆâ€  M2 + ÃŽÂ ²*3Real GDP + ÃŽÂ ²4*Unemployment rateâ‚ ¬Ã‚ ¦Ã¢â€š ¬Ã‚ ¦Ã¢â€š ¬Ã‚ ¦Ã¢â€š ¬Ã‚ ¦.. (2) Unemployment rate and real GDP are also used here as control variables for the same reasons given above. The data on percentage change in M1 and M2 were obtained from Federal Reserve Economic Data from the website of the Federal Reserve Bank of St. Louis. We were able to get the monthly data of M1 and M2 and then got the quarterly averages to produce the quarterly data. DATA DESCRIPTION In this section, we define and describe the various data used in this study. We used quarterly data from 1990 to 2009. The variables used in this analysis include; The Federal Funds Rate; The federal funds rate is a monetary policy tool used by the Central Bank/Federal reserve of the country to regulate the economy. Economists believe it has an inverse relationship with stock prices as because when there is an upward movement in stock prices above the desirable level, the federal reserve increases (contractionary) the federal funds rate . This leads to a decrease in the amount of money demanded by individuals thereby causing a lower demand for stocks and pushing down stock prices. We obtained data on the federal funds rate from the website of the federal reserve bank of Louisiana. 2. The Consumer Price Index; A consumer price index (CPI) is an index that estimates the average price of consumer goods and services purchased by households. It is used in our study to calculate inflation. We do this using the eviews software (100 ÃÆ'— (cpi â‚ ¬Ã¢â‚¬Å" cpi ( -4)). We obtained the quarterly data on CPI from the website of the International Monetary fund in washington. The CPI has an inverse relationship with monetary policy actions. 3. Real Gross Domestic Product (Real GDP); This can be defined as a measure which adjusts for inflation and reflects the value of all goods and services produced in a given year, expressed in base year prices. Real GDP provides a more accurate figure as it accounts for changes in the price level. The quarterly data on Real GDP is obtained from the website of the International Monetary Fund, Washington. 4. SP 500; It is a capital weighted index of the prices of 500 large-cap common stocks actively traded in the United States. It is believed to have an inverse relationship with monetary policy as an expansionary (interest rate reduction) monetary policy leads to an upward movement of the sp500 index. The quarterly data for the sp500 is obtained from the federal reserve bank of Louisiana. 5. Unemployment Rate; The unemployment rate is used as one of the control variables. It is an important indicator of the wellbeing of an economy. The lower the unemployment rate, the higher the aggregate demand for stock thereby pushing up stock prices. The quarterly data on unemployment rate is obtained from the website of the Federal Reserve Bank of Louisiana. We get the quarterly data by finding quarterly averages from the monthly data provided. 6. Monetary aggregates â‚ ¬Ã¢â‚¬Å" M1 and M2; M1 is a monetary aggregate and it includes the transaction deposits of banks and cash in circulation and all other money equivalents that are easily convertible into cash while includes M1 plus short-term deposits in banks and 24-hour money market funds. Money supply has a positive relationship with stock prices because the higher the money supply, the higher the demand for stock which eventually increases stock prices. We split money supply into M1 and M2 to find out if they have the same relationship with stock prices. The quarterly data on percentage change in monetary aggregates is obtained from the website of the federal reserve bank of Louisiana. We also had to calculate the quarterly averages of the monthly data given. DATA ANALYSIS Model 1: The Taylor rule it = r*t + ÃŽÂ ² (à Ã¢â€š ¬ tâ‚ ¬Ã¢â‚¬Å" à Ã¢â€š ¬*t) +ÃŽÂ ³ (yt â‚ ¬Ã¢â‚¬Å" Ã…Â ·t)+ ÃŽÂ µt Dependent Variable: FED_FUNDS_RATE Method: Least Squares Date: 07/05/10 Time: 20:19 Sample(adjusted): 1991:1 2009:4 Included observations: 76 after adjusting endpoints Variable Coefficient Std. Error t-Statistic Prob. C 3.615513 1.220783 2.961634 0.0041 INFLATION 0.684264 0.156212 4.380348 0.0000 OUTPUT_GAP -1.42E-06 9.83E-07 -1.442803 0.1534 R-squared 0.249642 Mean dependent var 3.860658 Adjusted R-squared 0.229085 S.D. dependent var 1.686064 S.E. of regression 1.480394 Akaike info criterion 3.661167 Sum squared resid 159.9844 Schwarz criterion 3.753170 Log likelihood -136.1244 F-statistic 12.14348 Durbin-Watson stat 0.181830 Prob(F-statistic) 0.000028 The estimation results are; it =3.62 + 0.68(à Ã¢â€š ¬ tâ‚ ¬Ã¢â‚¬Å" à Ã¢â€š ¬*t) â‚ ¬Ã¢â‚¬Å" 1.42 (yt â‚ ¬Ã¢â‚¬Å" Ã…Â ·t) The coefficient associated to inflation is positive, 0.68, but is statistically significant with a p-value of 0.00. The coefficient associated with the output gap is negative (-1.42) and statistically significant. The estimated stabilizing rate of interest (c) is positive (3.61) and statistically significant. An R-squared of 0.25 means that we are only able to explain about 25% of the variability in the interest rate. The augmented taylor rule model: it = ÃŽÂ ± + ÃŽÂ ²Et(à Ã¢â€š ¬ t+iâ‚ ¬Ã¢â‚¬Å" à Ã¢â€š ¬*t+i) +ÃŽÂ ³Et (yt+i+ Ã…Â ·t+i)+ˆ‘Π´1 à Ã¢â‚¬ ¦t-1 + ÃŽÂ µt one lag Dependent Variable: FED_FUNDS_RATE Method: Least Squares Date: 07/05/10 Time: 21:30 Sample(adjusted): 1991:3 2009:4 Included observations: 74 after adjusting endpoints Variable Coefficient Std. Error t-Statistic Prob. C 8.298961 1.280893 6.479044 0.0000 INFLATION_F 0.548999 0.181198 3.029825 0.0034 OUTPUT_GAP_F -9.10E-06 1.51E-06 -6.041926 0.0000 S(-1) 4.24E-05 7.35E-06 5.775767 0.0000 R-squared 0.442430 Mean dependent var 3.809595 Adjusted R-squared 0.418534 S.D. dependent var 1.678852 S.E. of regression 1.280190 Akaike info criterion 3.384432 Sum squared resid 114.7220 Schwarz criterion 3.508976 Log likelihood -121.2240 F-statistic 18.51494 Durbin-Watson stat 0.214690 Prob(F-statistic) 0.000000 Interpretation: The estimated regression is; it = 8.30 + 0.55Et(à Ã¢â€š ¬ t+iâ‚ ¬Ã¢â‚¬Å" à Ã¢â€š ¬*t+i) -9.10Et (yt+i+ Ã…Â ·t+i)+4.24ˆ‘à Ã¢â‚¬ ¦t-k The coefficient associated to expected inflation is positive (0.55) but is statistically significant because it has a p-value of 0f 0.003, the coefficient associated with expected output gap is negative (-9.10) and is statistically significant (p-value = 0.000). The coefficient associated with the change in asset prices (lagged by 1 for better estimation) which is denoted by S (-1) is negative and it is statistically significant therefore we reject the null hypothesis. The measure of goodness of fit (R-square) is 0.44 meaning that we are able to explain about 44% of the variability in the interest rate Our model consistently overestimates the actual interest rate and the residuals do not seem to be independently and identically distributed. We therefore conduct some tests which include: 1. The Jacque-Bera test: This is a statistic that measures the difference of the skewness and kurtosis of the series with those from a normal distribution. By simply looking at the histogram, we can see that the distribution is roughly normal and the jarque-bera statistic of 0.58 shows that it is not statistically significant and we should accept the null hypothesis. The white test: This is used to test whether the errors are heteroskedastic or not. In the presence of heteroskedasticity, OLS estimates are consistent but efficient. White Heteroskedasticity Test: F-statistic 3.846209 Probability 0.000621 Obs*R-squared 25.97528 Probability 0.002062 Test Equation: Dependent Variable: RESID^2 Method: Least Squares Date: 07/06/10 Time: 00:41 Sample: 1991:3 2009:4 Included observations: 74 Variable Coefficient Std. Error t-Statistic Prob. C -35.28961 24.46199 -1.442630 0.1540 INFLATION_F -5.419657 3.008210 -1.801622 0.0763 INFLATION_F^2 0.307231 0.200286 1.533961 0.1300 INFLATION_F*OUTPUT_GAP_F 5.95E-06 2.83E-06 2.105586 0.0392 INFLATION_F*S(-1) -2.78E-05 1.73E-05 -1.603361 0.1138 OUTPUT_GAP_F 9.90E-05 5.34E-05 1.852558 0.0686 OUTPUT_GAP_F^2 -6.19E-11 2.74E-11 -2.257288 0.0274 OUTPUT_GAP_F*S(-1) 3.35E-10 1.43E-10 2.337290 0.0226 S(-1) -0.000309 0.000140 -2.205282 0.0310 S(-1)^2 -7.97E-11 5.33E-10 -0.149679 0.8815 R-squared 0.351017 Mean dependent var 1.550298 Adjusted R-squared 0.259754 S.D. dependent var 1.968439 S.E. of regression 1.693596 Akaike info criterion 4.016674 Sum squared resid 183.5692 Schwarz criterion 4.328034 Log likelihood -138.6169 F-statistic 3.846209 Durbin-Watson stat 0.580160 Prob(F-statistic) 0.000621 According to the two test statistics involved in the regression result, we can say that the distribution is statistically significant so we can reject null hypothesis. The Durbin-Watson test: This is used to test for serial correlation. Autocorrelated residuals means that OLS is no longer best, linear, unbiased estimators and that the standard errors computed using the OLS formula are not correct. The Durbin-Watson statistic of 0.214690 shows that there is positive serial correlation as DW Model 2: SP500 = ÃŽÂ ²1 + ÃŽÂ ²2 federal funds rate + ÃŽÂ ²3real GDP + ÃŽÂ ²4unemployment rate. The aim of this model is to determine if the federal funds rate has any impact on the stock market. Real GDP and unemployment rate are used as control variables for reasons given in the research methodology. Dependent Variable: SP500 Method: Least Squares Date: 07/06/10 Time: 01:38 Sample: 1990:1 2009:4 Included observations: 80 Variable Coefficient Std. Error t-Statistic Prob. C -115.7008 222.2313 -0.520632 0.6041 FED_FUNDS_RATE 0.990301 12.96436 0.076386 0.9393 REAL_GDP01 0.159538 0.010327 15.44916 0.0000 UNEMPLOYMENT_RATE -119.5674 17.42177 -6.863101 0.0000 R-squared 0.872734 Mean dependent var 924.0339 Adjusted R-squared 0.867710 S.D. dependent var 378.2205 S.E. of regression 137.5651 Akaike info criterion 12.73478 Sum squared resid 1438237. Schwarz criterion 12.85388 Log likelihood -505.3912 F-statistic 173.7244 Durbin-Watson stat 0.350064 Prob(F-statistic) 0.000000 Interpretation: The estimated regression is: sp500 =-115.78 + 0.99*actual change in federal funds rate + 0.16*real GDP â‚ ¬Ã¢â‚¬Å" 119.57* unemployment rate. The coefficient associated with the federal funds rate is negative and is not statistically significant. The coefficient associated with the real GDP is positive and is statistically significant while the coefficient associate

Iran-Contra Affair: The Diversion Scandal Essay -- Essays Papers

Iran-Contra Affair: The Diversion Scandal Eugene Hasenfus of Marinette, Wisconsin was captured when his cargo plane suffered damaging missile blows. Hasenfus’ outdated cargo plane was knocked from the sky as a result of Nicaraguan surface to air missiles. After notifying the office of the United States Vice-President, informants in both El Salvador and Costa Rica would scramble to assess and control a seemingly uncomplicated situation. While United States officials prepared to limit their damages, the Nicaraguan captors televised Hasenfus’ explanation of illegal actions by the United States and specifically the Reagan Administration in support of the rebel Contras. President Ronald Reagan strongly opposed the Sandinista government of Nicaragua in 1979, suggesting its communist nature as the reason for a necessary opposition. While the workings of the Iran-Contra affair were entirely covert, there was a time when Reagan openly supported Nicaraguan rebel factions. The president was understood to strongly oppose the Sandinista regime as evident by the termination of Nicaraguan aid and the support of the Nicaraguan Democratic Resistance. At one point, Regan goes on to state his readiness "to accept the idea of overt aid to the anti-Sandinista guerrillas in Nicaragua." Reagan went on to address Congress and compel them to take action in Nicaragua as a function of United States foreign policy. A joint session of Congress however was unconvinced as Reagan’s support of anti-Sandinista groups would not prevail. The Democratic majority of the House of Representatives would succeed in their doubt of anti-Sandinista efforts, actualized by specific l egislation. Representative Edward P. Boland introduced the â€Å"Boland Ammendment† for the ... ... system for the Contras. On November 25, 1986 President Reagan and Meese announced the scandal on national television, as well as John Pointdexter’s retirement and Oliver North’s reassignment to the United States Marines. Bibliography 1) Byrne, Malcolm. Digital National Security Archive. 26 Jan. 1990. National Security Archive. <http://nsarchive.chadwyck.com/icessayx.html>. 2) Draper, Theodore. A Very Thin Line. 1991. Questia Online Library 3) Grosvenor, Charles R. The Iran Contra Scandal. 1995. <http://www.inthe80s.com/scandal.html>. 4) Stitch, Rodney. Defrauding America. N.p.: Diablo Western P, 1984. 1-654. 5) The Iran Contra Conspiracy. N.p.: W.W Norton & Company, 1998. 4-544. 6) Walsh, Lawerence E. United States Court of Appeals. Final Report of the Independent Counsel for Iran/Contra Matters. 04 Apr. 1993. Iran-Contra Affair: The Diversion Scandal Essay -- Essays Papers Iran-Contra Affair: The Diversion Scandal Eugene Hasenfus of Marinette, Wisconsin was captured when his cargo plane suffered damaging missile blows. Hasenfus’ outdated cargo plane was knocked from the sky as a result of Nicaraguan surface to air missiles. After notifying the office of the United States Vice-President, informants in both El Salvador and Costa Rica would scramble to assess and control a seemingly uncomplicated situation. While United States officials prepared to limit their damages, the Nicaraguan captors televised Hasenfus’ explanation of illegal actions by the United States and specifically the Reagan Administration in support of the rebel Contras. President Ronald Reagan strongly opposed the Sandinista government of Nicaragua in 1979, suggesting its communist nature as the reason for a necessary opposition. While the workings of the Iran-Contra affair were entirely covert, there was a time when Reagan openly supported Nicaraguan rebel factions. The president was understood to strongly oppose the Sandinista regime as evident by the termination of Nicaraguan aid and the support of the Nicaraguan Democratic Resistance. At one point, Regan goes on to state his readiness "to accept the idea of overt aid to the anti-Sandinista guerrillas in Nicaragua." Reagan went on to address Congress and compel them to take action in Nicaragua as a function of United States foreign policy. A joint session of Congress however was unconvinced as Reagan’s support of anti-Sandinista groups would not prevail. The Democratic majority of the House of Representatives would succeed in their doubt of anti-Sandinista efforts, actualized by specific l egislation. Representative Edward P. Boland introduced the â€Å"Boland Ammendment† for the ... ... system for the Contras. On November 25, 1986 President Reagan and Meese announced the scandal on national television, as well as John Pointdexter’s retirement and Oliver North’s reassignment to the United States Marines. Bibliography 1) Byrne, Malcolm. Digital National Security Archive. 26 Jan. 1990. National Security Archive. <http://nsarchive.chadwyck.com/icessayx.html>. 2) Draper, Theodore. A Very Thin Line. 1991. Questia Online Library 3) Grosvenor, Charles R. The Iran Contra Scandal. 1995. <http://www.inthe80s.com/scandal.html>. 4) Stitch, Rodney. Defrauding America. N.p.: Diablo Western P, 1984. 1-654. 5) The Iran Contra Conspiracy. N.p.: W.W Norton & Company, 1998. 4-544. 6) Walsh, Lawerence E. United States Court of Appeals. Final Report of the Independent Counsel for Iran/Contra Matters. 04 Apr. 1993.