Thursday, December 26, 2019

The Positive Effects Of Fashion Has On One s Life

In my blog post, I am going to be discussing the positive effects fashion can have on one’s life. My intended audience will be high school and college students who have somewhat of an interest in fashion, and also want to make their daily lives easier and more productive. I start off my blog post by asking the readers a question and making a statement that they would think is not true. After that, I go into my specifics where I discuss the three main aspects of my statement: fitting in, authority, and comfort. Each of these topics have their own claims which I use research to back up. Following that, I provide different types of examples to help develop my claim. I also included photos which gives a visual representation of each of my points. In my opinion, the most important part of my post would be the evidence I provide backing up these sources. Some of the evidence, for example where I mentions how dressing better helps you land a job, can be crucial, especially for my audience. I provide them with points that they can personally relate to and I believe it will help me reach out to them better. Furthermore, the use of images can provide a visual example which can attract the attention of my audience. Additionally, the images can portray what can occur when you follow the tips provided. Look Good Feel Better Why should you care about the way you dress ? It is just clothing right it can’t really make a difference. People view fashion as this superficialShow MoreRelated1920s Fashion Essay1036 Words   |  5 Pages1920s Fashion In the 1920s, fashion trends were the shorter low-waisted dresses and revealing styles worn by flappers. With their short-bobbed hairstyles and cloche hats, down to scarves and stocking with bold. The 1920s fashion strikes the design era for fashion by having change in the women’s fashion. The fashion changed and characterized the women in the 1920s, as they called it the roaring twenties the women started gaining their free rights and independence. Fashion for women had a positiveRead More90s Hip Hop and Rap1320 Words   |  6 Pageship-hop first started to come together in the 1970 s, but didn t really materialize and become popular until the 1990 s. With a huge surge in popularity and growth in the 1990 s, it seemed that rap and hip-hop had started a cultural phenomenon that still has noticeable effects easily seen today in music and also in pop culture. A cultural phenomenon is an idea, trend, or movement that shapes and defines that time period. During the 1990 s, rap and hip-hop spread like wild fire across the nationRead MoreHow Fashion Has Reflected the Changes in Society1429 Words   |  6 PagesHow Fashion Has Reflected the Changes in Society INTRODUCTION Change is a theme that is ever-present in our culture and society. Often this change is reflected in the dress of its people. From the fashionable silhouettes of the 1920’s to the colorful 60’s, hip-hop look of 90’s up to the modern twist of today, social change and change in fashion has, in theory and practice, been linked. According to ask.com, Fashion can be defined as a prevalent style by a particular group at a particular timeRead MoreThe, Colorado And California A M Kingsville975 Words   |  4 Pagesmusic and television also remember her that she must spend money on Victoria’s Secret. Her greatest dream is to have the body that Julia has, the hottest model in Victoria’s Secret, but according to her, she is fat in contrast with her, also she want to emulate Julia in every aspect of her day life. Like Tina, many girls are fascinating in the way that fashion is, with exotic designs or unique smell, but they do not recognize that advertising is striking them more than they believe. Eating disordersRead MoreHow Fashion Has Changed The Lifestyles Of Everyday Life1519 Words   |  7 Pagesto start a fashion line in 1920’s? Fashion lets people define themselves by putting different styles together and creating something unique. Nevertheless, people see fashion as making a statement. Fashion gives individuality and lets indivauls create a statement for ourselves. However, people will also have on vintage wear whether the notice or not. Fashion change the lifestyles of many giving people a chance to be themselves Couture introduced itself in the 19th century when fashion designer,Read MoreDesigning A Garment From A Technical Drawing887 Words   |  4 PagesDesigning has always been my expression way through different channels like painting, illustration, puppet making, costume design creating a garment from a technical drawing. Briefly, I have started learning the meaning of design term as a narrowed down topic that comes from the visual, sensational and artistic side. In the art and design disciplines, there is no need asking other s opinions to complete an artwork. I mean Leonardo or Picasso had never asked help from someone else to finish hisRead MoreShort Story : N The Screen And Koons 1460 Words   |  6 PagesCooke Writing II n the screen and Koons Inside all adults are their 10 year old self’s, contained but there. For Jeff Koons, his profession has thus far been based on his love for the pure joy of childhood. Coming from a loving family, art and design was been present in his life from the start. His parents careers effected how he views the world and what he has done with the opportunities they gave to him. After attending Maryland Institute of College of Art and School of the Art Institute in ChicagoRead MoreThe Fashion : Unrealistic And Harmful Perceptions Of Beauty1500 Words   |  6 PagesThe Fashion Industrys’ Unrealistic and Harmful Perceptions of Beauty As you are flipping through the pages of any fashion magazine, you see that they are plastered with freakishly skinny, young women made up to resemble perfect barbie dolls. If you are the average american girl, you would probably be feeling a little more insecure about yourself than when you first opened the magazine. You begin to realize everything that you wish you could look like and are stuck comparing yourself to images thatRead MoreSchool Uniforms1506 Words   |  7 Pagesorderly, creates teachers who focus on teaching and students who focus on their job of learning† (Bily, 2014 p.5). The school dress code debate is not new and the belief that it makes schools safer and improves learning and test scores has been in the forefront as one of the many ways to improve and promote education in our country. The school classrooms in this country are nothing like they were in the past. Reading, writing, and arithmetic are basics of learning and help to build a strong foundation Read More Objectification Theory Essays1736 Words   |  7 Pagesto these women can lead to feelings of inadequacy, depression, and an overall low self-esteem. (Expand on, need a good opening paragraph to grab the reader’s attention) Objectification Theory Objectification theory has been proposed as a standard for understanding the effects of living in a culture that sexually objectifies women (Fredrickson Roberts, 1997). Objectification occurs when a person’s body is treated like a separate entity and is evaluated on its own merit, without consideration

Wednesday, December 18, 2019

Local Climatic Regimes Of West Bengal - 1619 Words

The study was conducted in Kolkata, ZSI, Latitude :22 ° 30 51.6888 and Longitude: 88 ° 19 30.5256 were recorded by GPS meter.A dead Gallus gallus (Linnaeus, 1758) was a bought from a market near Zoological Survey (ZSI) of India (n=3) for three seasons, Kolkata premises, and was kept in ambient outdoor conditions, inside the ZSI premises. The data for the abiotic factors was gathered from the meteorological data was collected from the Meterological Department, Alipore, Kolkata. The local climatic regimes of West Bengal is sub divided into three seasons, viz., pre monsoon (March to June), monsoon (July to October) and post monsoon (November to February). During the experiments, the measured average temperature ( °C ) ranged from 35 – 43, in the pre monsoon season, 37 – 30, in the monsoon season and 35 – 25, in the post monsoon season. Relative humidity (%) ranged from 59 – 45, in the pre monsoon season, 90 - 75, during the monsoon season and 42 - 3 5, in the post monsoon season. Average precipatation was null during the pre and post monsoon seasons, the range of the monsoon season was found to be 58 – 35. And average wind speed (km/hr) ranged from 31 - 13, in the pre monsoon season, 20 - 12, in the monsoon and 15 – 8, in the post monsoon season. (See table.1). II.b .) Collection of the fly specimen The chicken carcass was placed on a raised platform, surrounded by water on all sides to discourage ants and malise trap was used for overhead capture of dipteran specimens.Show MoreRelatedNatural Disasters in India with Special Reference to Tamil Nadu6855 Words   |  28 Pagesvolcanic eruptions, famines, drought, landslides etc. Amongst all the ones mentioned floods and earthquakes are the most common in India. India is no exception as it has been traditionally vulnerable to natural disasters on account of its unique geo-climatic conditions. Floods, droughts, cyclones, earthquakes and landslides have been recurrent phenomena in India due to large population growth, and migration into urban areas (De et al., 2005). Tamil Nadu has witnessed havoc caused by cyclones and stormRead MoreWater as a Source of Future Conflict in Sa26984 Words   |  108 Pagescovers four major rivers basins of SA which forms from Himalayas and irrigates huge area of this region; thereby offer edibles and living to the vast population. The four main co-riparian states are India-Pakistan and India–Bangladesh-Nepal lying in west and east correspondingly. The book has given stress that water scarcity is becoming the issue of conflict in this region. With the increasing population, industrial, agricultural and domestic uses, glaciers are melting and causing environmental degradationRead MoreDisaster Management Policies and Systems in Pakistan13687 Words   |  55 PagesEnergy Conservation Fund EIA Environmental Impact Assessment ERC Emergency Relief Cell FATA Federally Administered Tribal Areas FFC Federal Flood Commission GDO Goods Dispatch Organization GoP Government of Pakistan HKH Hindu Kush – Himalayan LGO Local Government Ordinance MDGs Millenium Development Goals MF Micro Finance MMTs Medical Mobile Teams MSDP Micro-Finance Sector Development Program NWFP North Western Frontier Province NA Northern Areas NCMC National Crisis Management Cell NDMA NationalRead MoreDev eloping Countries in the World Trade in Agriculture: Bangladesh Perspective.19109 Words   |  77 Pageswell documented. Tariffs remain much higher in agriculture than in manufactured products (figure 3.2.2.1). While this pattern is characteristic of trade regimes in all regional groups, the discrepancy is most remarkable in high income countries. But the level of tariffs, while high, greatly understates the degree of protection in the trade regimes in high-income countries because many products are afforded even higher levels of support by non tariff measures such as export subsidies and tariff rateRead MoreMineral Resources18511 Words   |  75 Pageshave vanished during recent times, both in India and in the rest of the world. Forests provide us with a variety of services. These include processes such as maintaining oxygen levels in the atmosphere, removal of carbon dioxide, control over water regimes, and slowing down erosion and also produce products such as food, fuel, timbe r, fodder, medicinal plants, etc. In the long term, the loss of these is far greater than the short-term gains produced by converting forested lands to other uses. Natural

Tuesday, December 10, 2019

Significance of Artifacts in Organizational Culture

Question: Write an essay on "Significance of Artifacts in Organizational Culture". Answer: 1.0 Introduction Artifacts are symbols or other physical objects used by a business organization that depict the company statement, values or even cultural background associated with the organization. These artifacts are cleverly created with the apparent sight of only logo but containing the companys cultural background that is revealed if studied closely (Rafaeli and Pratt 2013). In this essay, significance of artifacts for getting an insight into the companys culture and analysis of reputed companies using artifacts have been discussed. 2.0 Significance of Artifacts in Organizational Culture 2.1 Artifacts An artifact is a physical object or symbol that represents a company or a business organization. From the creation of these artifacts, people thought they are simple representations of the companys name or its functions (Carlile and Langley 2013). However, with growing number of research activities, researchers have found that these artifacts actually have a lot more meanings and can give a user a good insight on the cultural background of the company. 2.2 Example 1: Amazon.com Let the case of Amazon.com, a popular ecommerce website be taken. The company logo shows a hidden smiling face along with the name (Rothaermel 2015). This face depicts the culture of the company. Amazons main culture is based on making clients happy with their service and they show this particular culture in their logo. Figure 1: Amazon Logo with a Hidden Smiley Face (Source: Digital Synopsis 2016) 2.3 Example 2: Melbourne Food and Wine Festival This is festival conducted throughout the world by a business organization named Food Wine Festival. Their cultural background is based on providing food and wine to the guests during the hosted festival according to the local cultures. Their logo (artifact) shows a pictogram of a wine bottle that is also an inverted fork (Hogan and Coote 2014). The space between the fork blades also depict three people standing. This logo depicts everything about the business of the company. Figure 2: Logo of Melbourne Food Wine Festival (Source: Digital Synopsis 2016) 2.4 Analysis and Insight From the two examples, it is evident that the business organizations create the artifacts by keeping in mind a number of factors (Mullarkey, Hevner and Collins 2013). The artifact must be unique and represent the company. The artifact must contain the background of the company (services). The artifact should represent the services of the company in a pictographic form with a hidden layout that can be depicted only if studied closely. The pictograph also represents the cultural background of the company. The cultural aspect represents services, objectives, cultural following and other aspects related to the business of the company. The significance of artifacts of a business organization is massive and affects the business of the organization. Not only people show more interest in the company but also they create a distinct identity from the similar companies (Schneider, Ehrhart and Macey 2013). The artifacts also attract more customers as they can have clear cultural insight of the company and can be sure that the particular company is the best option for business. Hence, the artifacts are not only representations of companies but also are important aspects of business that allows the company to gain more popularity and build a distinct identity in the market. 3.0 Conclusion From the essay, it is evident that the artifacts of the business organizations are not merely simple symbols or representations of the company names; rather they are proofs of company culture, business and other factors. They give a user an insight about the companys cultural background if studied closely. Many reputed organizations create their artifacts with a lot of hidden meanings that can be explored for getting an insight about the company. References Carlile, P.R. and Langley, A. eds., 2013.How matter matters: Objects, artifacts, and materiality in organization studies(Vol. 3). Oxford University Press. Hogan, S.J. and Coote, L.V., 2014. Organizational culture, innovation, and performance: A test of Schein's model.Journal of Business Research,67(8), pp.1609-1621. Mullarkey, M.T., Hevner, A. and Collins, R., 2013. Inter-Organizational Social Networks: An Action Design Research Study. InProceedings of SIGPRAG Workshop, Milan(pp. 1-11). Rafaeli, A. and Pratt, M.G., 2013.Artifacts and organizations: Beyond mere symbolism. Psychology Press. Rothaermel, F.T., 2015.Strategic management. McGraw-Hill. Schneider, B., Ehrhart, M.G. and Macey, W.H., 2013. Organizational climate and culture.Annual review of psychology,64, pp.361-388.

Monday, December 2, 2019

SACHIN TENDULKAR free essay sample

Sachin Ramesh Tendulkar AM (i/səˈtÊÆ'É ªn tÉ›nˈduË lkÉ™r/; born 24 April 1973)[1] is an Indian cricketer widely acknowledged as the greatestbatsman in cricket today.[2] In 2002, Wisden Cricketers Almanack ranked him the second greatest Test batsman of all time, behind Don Bradman, and the second greatest one-day-international (ODI) batsman of all time, behind Viv Richards.[3] Tendulkar was a part of the 2011 Cricket World Cup winning Indian team in the later part of his career, his first such win in six World Cup appearances for India.[4] He was also the recipient of Player of the Tournament award of the 2003 Cricket World Cup held in South Africa. Tendulkar won the 2010 Sir Garfield Sobers Trophy for cricketer of the year at the ICC awards.[5] He has been recommended for the receipt of the Bharat Ratna award, in fact it has been speculated that the criteria for the award of the Bharat Ratna were changed to allow him receive the award. We will write a custom essay sample on SACHIN TENDULKAR or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page [6][7] He is also a member of Rajya Sabha of Parliament of India.[8] Tendulkar passed 30,000 runs in international cricket on 20 November 2009. On 5 December 2012, Tendulkar became first batsman in history to cross the 34,000 run aggregate in all formats of the game put together.[9][10][11] At 36 years and 306 days, he became the first ever player to score a double-century in the history of ODIs. Two years later he became the first player to score 100 international centuries.[12] As of October 2013, Tendulkar has played 662 matches in international cricket.[13] On 5 October 2013,Sachin Tendulkar became the 16th player and first Indian to aggregate 50,000 runs in all recognised cricket (First-class cricket, List A cricket and Twenty20 combined). Amitabh Harivansh Bachchan (IPA: [É™mÉ ªÃ‹Ë†taË bÊ ± ˈbÉ™ttÊÆ'É™n]; born 11 October 1942) is an Indian film actor. He first gained popularity in the early 1970s as the angry young man of Hindi cinema, and has since appeared in over 180 Indian films in a career spanning more than four decades.[1][2]Bachchan is widely regarded as one of the greatest and most influential actors in the history of Indian cinema.[3][4][5] So total was his dominance of the movie scene in the 1970s and 1980s that the French director Franà §ois Truffaut called him a one-man industry.[6] Bachchan has won many major awards in his career, including three National Film Awards as Best Actor (a record he shares with Kamal Hassan andMammootty), a number of awards at  international film festivals and award ceremonies and fourteen Filmfare Awards. He is the most-nominated performer in any major acting category at Filmfare, with 39 nominations overall. In addition to acting, Bachchan has worked as a playback singer, film producer and television presenter. He also had a stint in politics in the 1980s. The Government of India honoured him with the Padma Shri in 1984 and the Padma Bhushan in 2001 for his contributions towards the arts. Rajiv Ratna Gandhi (i/ˈrÉ‘Ë dÊ’iË v ˈÉ ¡Ã‰â€˜Ã‹ ndiË /; 20 August 1944 – 21 May 1991) was the sixth Prime Minister of India, serving from 1984 to 1989. He took office after the 1984 assassination of Prime Minister Indira Gandhi, his mother, to become the youngest Indian premier. A scion of the politically powerful Nehru–Gandhi family associated with the Indian National Congress party, for much of Rajivs childhood his grandfather Jawaharlal Nehru was prime minister. For his college education, he went to Britain where he met and began dating Antonia Maino, an Italian waitress. Rajiv returned to India in 1966 and became a professional pilot for the state-owned Indian Airlines. In 1968, he married Maino—who would subsequently change her name to Sonia Gandhi—and the couple settled down in Delhi to a happy domestic life with their children Rahul andPriyanka. Although for much of the 1970s his mother was prime minister, and his brother Sanjay wielded significant unofficial power, Rajiv remained apolitical. However, Sanjays death in a plane crash in 1980, Rajiv reluctantly entered politics at the behest of Indira. The following year he won from his brothers Amethi seat and became a member of the Lok Sabha (the lower house of Parliament). As part of his political grooming, Rajiv was made a general secretary of the Congress and given significant responsibility in organising the 1982 Asian Games. Kalpana Chawla (March 17, 1962[1] – February 1, 2003) was born in Karnal, India. She was the first Indian-American astronaut[2] and first Indian woman in space.[3] She first flew on Space Shuttle Columbia in 1997 as a mission specialist and primary robotic arm operator. In 2003, Chawla was one of the seven crew members killed in the Space Shuttle Columbia disaster. Chawla joined the NASA Astronaut Corps in March 1995 and was selected for her first  flight in 1996. She spoke the following words while traveling in the weightlessness of space, You are just your intelligence. She had traveled 10.67 million km, as many as 252 times around the Earth. Her first space mission began on November 19, 1997 as part of the six-astronaut crew that flew the Space Shuttle Columbia flight STS-87. Chawla was the first Indian-born woman and the second Indian person to fly in space, following cosmonaut Rakesh Sharma who flew in 1984 in a spacecraft. On her first mission, Chawla traveled over 10. 4 million miles in 252 orbits of the earth, logging more than 372 hours in space. During STS-87, she was responsible for deploying the Spartan Satellite which malfunctioned, necessitating a spacewalk by Winston Scott and Takao Doi to capture the satellite. A five-month NASA investigation fully exonerated Chawla by identifying errors in software interfaces and the defined procedures of flight crew and ground control. After the completion of STS-87 post-flight activities, Chawla was assigned to technical positions in the astronaut office to work on the space station, her performance in which was recognized with a special award from her peers. Rabindranath TagoreÃŽ ²[†º] pronunciation (help ·info) (Bengali: à ¦ °Ã  ¦ ¬Ã  §â‚¬Ã  ¦ ¨Ã  § Ã  ¦ ¦Ã  § Ã  ¦ °Ã  ¦ ¨Ã  ¦ ¾Ã  ¦ ¥ à ¦  Ã  ¦ ¾Ã  ¦â€¢Ã  § Ã  ¦ °) (7 May 1861 – 7 August 1941),ÃŽ ³[†º] sobriquet Gurudev,ÃŽ ´[†º] was aBengali polymath who reshaped his regions literature and music. Author of Gitanjali and its profoundly sensitive, fresh and beautiful verse,[2] he became the first non-European to win the Nobel Prize in Literature in 1913.[3] In translation his poetry was viewed as spiritual and mercurial; however, his elegant prose and magical poetry remain largely unknown outside Bengal.[4] Tagore introduced new prose and verse forms and the use of colloquial language into Bengali literature, thereby freeing it from traditional models based on classical Sanskrit. He was highly influential in introducing the best of Indian culture to the West and vice versa, and he is generally regarded as the outstanding creative artist of modern South Asia.[5 ][6][7] A Pirali Brahmin[8][9][10][11] from Calcutta, Tagore wrote poetry as an eight-year-old.[12] At age sixteen, he released his first substantial poems under the pseudonym BhÄ nusiá ¹Æ'ha (Sun Lion), which were seized upon by literary authorities as long-lost classics.[5][13] He graduated to his first short stories and dramas—and the  aegis of his birth name—by 1877. As a humanist, universalist internationalist, and strident anti-nationalist he denounced the Raj and advocated independence from Britain. As an exponent of the Bengal Renaissance, he advanced a vast canon that comprised paintings, sketches and doodles, hundreds of texts, and some two thousand songs; his legacy endures also in the institution he founded, Visva-Bharati University.[14] Tagore modernised Bengali art by spurning rigid classical forms and resisting linguistic strictures. His novels, stories, songs, dance-dramas, and essays spoke to topics political and personal. Gitanjali (Song Offering s), Gora (Fair-Faced) and Ghare-Baire (The Home and the World) are his best-known works, and his verse, short stories, and novels were acclaimed—or panned—for their lyricism, colloquialism, naturalism, and unnatural contemplation. His compositions were chosen by two nations as national anthems: Indias Jana Gana Mana and Bangladeshs Amar Shonar Bangla.

Wednesday, November 27, 2019

Step to Writting a Good Essay Essays

Step to Writting a Good Essay Essays Step to Writting a Good Essay Essay Step to Writting a Good Essay Essay Upon deciding the topic for my final paper I decided on , Credit scores are a fair measure to help lenders to estimate potential risk. My point of view considering this topic is that I will explain why I agree with the issue then follow with supporting facts and details. I will proceed to explain the reasons why lenders and banks use scores t evaluate the risk. I will show that most people which have a repeated and unsatisfactory credit history usually, don’t change. I will share information on those with good credit established and how to maintain it. I will show how having good or bad credit affects your daily living. I will discuss how credit bureaus come up with credit scores, where their information comes from, and what to do if it is not correct. I will present factual evidence to support my views and opinions. I will begin my paper with enthusiasm, and confidence to keep my audience focused and interested. In my essay, I will disclose a number of issues that can destroy your credit. I will provide some ways to go about correcting your credit. I would like my audience to understand that your credit has a huge impact on not only your lifestyle but the economy as well. I want the audience to know that credit is something that you can without a doubt destroy within a matter of weeks or in as little as a month. I would like my audience to also be informed that it can be corrected as well, but it is a long and tedious process. I will facilitate my audience to understanding the pros and cons of both sides of credit scores. Having good or fair credit is always a must or a must try to have in this day in life. Once I finalize my persuasive essay, I hope to have my audience in my court, and understanding why it is so critical to have credit scores to measure risk up front for lenders and bankers. Unless you resolve your old credit tribulations, it is almost impossible to obtain a new line of credit at a reasonable interest rate. People need to become conscious and aware that having good credit is critical and positive aspect in life. Potential employers can even check your credit and credit scores. If your credit or credit score is substandard then it is doubtful you will get the job, even if you are the best person for the job or highly qualified due to your credit or credit scoring. Furthermore, most people do not realize how their credit can affect their lifestyle, future wealth and wellbeing. We as consumers should become more aware that it is our behavior and decisions that we make used to determine our credit worthiness. The fact of the matter is that lenders have used this technique for years, and I doubt it will ever change in the near future.

Saturday, November 23, 2019

Solicitar visa de turista a EE.UU. desde otro país

Solicitar visa de turista a EE.UU. desde otro paà ­s Si se desea  solicitar una visa de turista (paseo o placer) para los Estados Unidos en un paà ­s que no es el de residencia habitual se deben seguir una serie de reglas porque no siempre es posible. Esta  solicitud se conoce en inglà ©s como peticià ³n de Third Country Nationals o TCNs, por sus siglas en inglà ©s.   Cundo no se puede solicitar visa de turista en Mà ©xico, Canad o Bahamas Puede ocurrir que una persona extranjera se encuentre de visita en Mà ©xico, Canad o Bahamas y, debido a su proximidad, desee ingresar tambià ©n a EE.UU. y, si no tiene visa de turista, considere en pedirla en ese momento. Segà ºn las normas actuales, en los siguientes dos casos no pueden solicitar visa de turista para Estados Unidos en Mà ©xico, Canad o Bahamas las personas que no son  ciudadanas o residentes habituales de esos distritos cuando: En primer lugar, los solicitantes hubieran estado ilegalmente en algà ºn momento en los Estados Unidos. El caso ms frecuente es el de los extranjeros que no salieron dentro del plazo permitido provocando lo que se conoce en inglà ©s como overstay de la visa. Estas personas obligatoriamente deben solicitar la nueva visa en un consulado de los Estados Unidos en el paà ­s del que son nacionales o en el que residen habitualmente. En segundo lugar, todos los ciudadanos de los paà ­ses que Estados Unidos clasifica oficialmente como patrocinadores de terrorismo. En la actualidad, los paà ­ses incluidos en dicha lista son Corea del Norte, Irn, Sudn y Siria. Adems, debe tenerse en cuenta que en los casos en los que sà ­ se puede solicitar la visa es habitual que los consulados estadounidenses que se encuentran ubicados en las ciudades fronterizas de Mà ©xico con Estados Unidos y de Canad con EE.UU. no procesen, como regla general, las visas de turista para extranjeros que no son ni ciudadanos mexicanos ni residentes en ese paà ­s. Asimismo, dichos consulados ubicados a lo largo de la frontera tampoco tramitan habitualmente ninguna visa E si el solicitante no reside habitualmente en esa rea.  Hay diversos tipos de visas E, desde inmigrantes o las no inmigrantes de inversià ³n.   En los dems casos, se puede solicitar una visa de turista para Estados Unidos en cualquier embajada o consulado. En el caso de haber estado previamente como ilegal en Estados Unidos o de haber violado las condiciones de la visa, asegurarse primero de que es posible hacerlo en el consulado de eleccià ³n. Sin embargo,el que pueda solicitarse la visa en otro consulado no quiere decir que sea recomendable. Hay que evitar dar la impresià ³n de que se est buscando y comparando para decidirse por el consulado que podrà ­a juzgarse como ms permisivo a la hora de aprobar una visa. Esta prctica es lo que se conoce en inglà ©s con el nombre de consulate shopping. Adems, por motivos prcticos puede ser ms difà ­cil en estos casos de solicitudes presentadas fuera del paà ­s de residencia habitual acreditar lazos familiares y econà ³micos fuertes en el paà ­s en el que se reside, que es un requisito fundamental para sacar la visa de turista. Por à ºltimo, cabe destacar que aunque sà ­ que es cierto que los porcentajes de aprobacià ³n de la visa son diferentes por paà ­ses, no menos cierto es que la ley migratoria es la misma y se aplica por igual en todos los consulados de EE.UU. Cundo no es necesaria la visa de turista Los ciudadanos de 38 paà ­ses estn dispensados de solicitar la visa de turista si desean ingresar a Estados Unidos por un mximo de 90 dà ­as.   Este privilegio tambià ©n aplica, con carcter general, a las personas con doble nacionalidad y que tienen uno de esos pasaportes, aunque residan habitualmente en un paà ­s que sà ­ necesita visa.   Sin embargo, hay que tener en cuenta que lo que no se puede hacer es intentar utilizar uno de esos pasaportes que no requieren visa, como por ejemplo el italiano, el espaà ±ol o el chileno, cuando ya se ha tenido previamente una negacià ³n de visa con el otro pasaporte, como por ejemplo el argentino, el venezolano, etc. Puntos Clave: solicitar visa turista para EE.UU. desde paà ­s en el que no se reside habitualmente Las peticiones de una visa de turista para EE.UU. en un paà ­s diferente al de residencia habitual o al de la propia nacionalidad siguen unas reglas que se conocen como Third Country Nationals.Estas son las reglas que aplican a Mà ©xico, Canad y Bahamas paà ­ses que, por su proximidad geogrfica a los Estados Unidos, son de interà ©s para los potenciales solicitantes de visa.No pueden solicitar visa de turista en Mà ©xico, Canad o Bahamas los ciudadanos de terceros paà ­ses que previamente han estado en EE.UU. en situacià ³n de ilegalidad o que violaron las condiciones de sus visas.Tampoco pueden solicitarlas ls personas con pasaportes de paà ­ses declarados como patrocinadores de terrorismo: Irn, Corea del Norte, Siria y Sudn.Aà ºn en los casos en los que se puede solicitar la visa de turista, los consulados americanos a lo largo de la frontera entre Mà ©xico y EE.UU. y Canad y EE.UU. solamente tramitan las solicitudes de los residentes en su distrito.Aà ºn en los casos en los que est permitido sin ninguna restriccià ³n pedir la visa de turista en otro paà ­s, por ejemplo, un argentino en Colombia, debe evitarse dar la impresià ³n de estar haciendo lo que se conoce como consulate shopping.Los requisitos para obtener la visa americana son los mismos en todos los consulados y embajadas. Este es un artà ­culo informativo. No es asesorà ­a legal.

Thursday, November 21, 2019

Discuss the meaning of MRP terms, such as planned order release and Assignment

Discuss the meaning of MRP terms, such as planned order release and schedule order receipts - Assignment Example Moreover, the proposed order is determined by balancing the expected order receipt in the procurement lead-time of the item. Therefore, a planned order release transaction incorporates within a particular time, for it to schedule within a companies or organizations procedure. Confirmation of the order is determined by balancing the amount of the order in the receipts of procurement over a particular period (Coyle et al., 2012). It is a scheduled order designed to meet the customers’ demand in a market within the firms planned orders and forecasted demand. Planned order within the materials requirement planning of a company meets the customers’ demand the time speculated to reach a customer. Demand in MRP systems originates from finished goods within forecast design or components of products. Moreover, the sources of MRP system fall under independent and dependent requirements. An Independent order affects the demand for finished goods while dependent demand refers to demand items, which are subassemblies or component parts used in the production of finished

Tuesday, November 19, 2019

Enhancing the Patient Experience Essay Example | Topics and Well Written Essays - 1250 words

Enhancing the Patient Experience - Essay Example Due to space imitation, the paper will focus only on the challenges that were experienced during the case study discussed, and not on the treatment. Different studies have revealed that person-centred care not only gives psychological satisfaction to patients, but also helps the nurses to gain psychological satisfaction in their job, as person-centred care not only makes easy their ‘job’, but also provides certain sense of spiritual meaning and depth to the process of caring. The Case Study The case study included in this paper is of a teenage female client who was recommended by her school for counseling and therapy. The physical examination of the client had revealed that the client was severely overweight and was suffering from obesity related problems. Her academic performance had gone down drastically in last six months, and she was becoming emotionally and psychologically distant from her peers and teachers. However, the decision to send her for counseling was take n when her parents approached the school regarding her performance and expressed worries over her behaviour problems. The method used to understand the client was personal interview. Six sessions of interview were conducted with the client. It was found that she was suffering from low self-esteem and insecurity. ... The client’s eating pattern was related to the emotional insecurity and unfulfilled needs. Hence, it was very necessary to adopt a person-centred approach to gain her confidence and faith. Person-centred approach is one of the most effective approaches in care. According to Ford and McCormack (2000), â€Å"in order to provide person-centred care, practitioners must acquire knowledge about the person which allows them to provide care and services that are compatible with individual’s values and which are, as such, highly valued† (Clarke, Hanson and Ross 2003, p.697). However, understanding the values of a person is not an easy task. There were many challenges that were experienced during the journey of the treatment process. Interestingly, the challenges started right from the beginning of the treatment as the first challenge was faced when I had to understand the core values of my client. Building mutual trust Communication between nurse and patient is an importa nt aspect of a successful treatment. However, communication is possible only when the patient trusts the nurse and believes that the details of his personal life will remain confidential. Hence, in order to encourage my client to open up emotionally, it was necessary for me to gain her trust. It was important to assure her that I was not going to judge her in any way, but understood her point of view completely. It has been observed that due to differing interpretation of illness and related conditions, the mutual trust between the nurse and the patient, which is necessary for good communication, cannot be developed (Sartain, Clarke and Heyman 2000, p. 913). Mutual trust can be enhanced by accessing and resolving the difference in patient’s and service provider’s interpretation of the medical

Sunday, November 17, 2019

Adele Is My Role Modle Essay Example for Free

Adele Is My Role Modle Essay Adele Laurie Blue Adkins was born in Tottenham, north London, England, to Penny Adkins, an English teenager, and Mark Evans, a Welshman, on 5 May 1988 Evans walked out when Adele was two, leaving her 20-year-old mother to raise her single-handedly,for which Adele has still not forgiven him. She has a younger half-brother on her fathers side, Cameron Evans. She began singing at age four and asserts that she became obsessed with voices. Adele has cited the Spice Girls as a major influence in regard to her love and passion for music, stating that they made me what I am today. Adele impersonated the Spice Girls at dinner parties as a young girl. To make her look like English RB and urban contemporary singer Gabrielle, her mother made an eye patch with sequins, which Adele later said was embarrassing. See more: Examples of satire in adventures of huckfinn essay At the age of nine, Adele and her mother, a furniture-maker and adult learning activities organiser, relocated to Brighton. Despite this move, she remains an ardent fan of her hometown Premier League football club Tottenham Hotspur. Two years later, she and her mother moved back to London; first to Brixton, and then to neighbouring district West Norwood, in south London. West Norwood is the subject for Adeles first record, Hometown Glory, written when she was 16. After moving to south London, she became interested in RB artists such as Aaliyah, Destinys Child and Mary J. Blige. Adele says that one of the most defining moments in her life was when she watched Pink perform at Brixton Academy. It was the Missundaztood record, so I was about 13 or 14. I had never heard, being in the room, someone sing like that live [ ] I remember sort of feeling like I was in a wind tunnel, her voice just hitting me.

Friday, November 15, 2019

The Truth About Physics And Religion :: essays research papers

The Truth About Physics and Religion Many people believe that physics and religion are separate entities. They claim that physics deals only with the objective, material world, while religion deals only with the world of values. It is obvious, from these, and from many other comparisons, that conflicts have arisen between physics and religion. Many are convinced that the two fields completely oppose each other, and are not related in any ways. Many people, who follow a particular religion, feel offended by the claims that physicists have made, while physicists believe that religion has no basis in reality. I will show, however, that these conflicts are founded on a misunderstanding, and that there is no division between physics and religion. I will also prove that the misunderstanding lies in the parables of religion and in the statements made by physicists. Furthermore, I will show that only physicists can really know the truth of physics, and only religious followers can know the truth of that religion; everyone else has to take it on faith.   Ã‚  Ã‚  Ã‚  Ã‚  Many people believe that physics and religion are entirely separate. They claim that physics is only concerned with discovering what is true or false, while religion is concerned with what is good or evil. Scientists appear to agree that â€Å"physics is the manner in which we argue about the objective side of reality.† Religious followers, on the other hand, agree that â€Å"religion is the way we express the subjective decisions that help us choose the standards by which we live.† Although these definitions seem to be contrasting, an important element remains absent, an element that must first be considered before religion and physics can be compared.   Ã‚  Ã‚  Ã‚  Ã‚  Those who think that religion has no basis in reality also believe that there is an â€Å"obvious† separation between the two fields. They think that religion is a jumble of false assertions, with no basis in reality. Paul Dirac, a physicist, once said: The very idea of God is a product of the human imagination. It is quite understandable why primitive people, who were so much more exposed to the overpowering forces of nature than we are today, should have personified these forces in fear and trembling. But nowadays, when we understand so many natural processes, we have no need for such solutions. Dirac, and those who think the same way, however, fails to consider the essential element that has caused many to misunderstand the relationship between physics and religion. What they fail to realize is that religion uses language in quite a different way from science. The language of religion is more closely related to the language of poetry than to the language of science.

Tuesday, November 12, 2019

Music and Brain Development Essay

There are three major perspectives on the positive impact of music education to the core curricula in school. The study on how music shares value to brain development has opened new views for all educators. According to the study of Neurological Research in February 1997, music develops abstract reasoning skills needed for the learning process of children in math and science. It was proven that training in music is more efficient than computer learning for teaching math and science skills (Peretz and Zatorre, 2005).   It was reported that music training could be more effective than computer instruction for teaching these skills. The findings were the result of a two year experiment with preschoolers by Rauscher et. Al. Wriht et al in 1997, compared the effects of musical and non-musical training on intellectual development as a follow-up to their studies on music can enhance spatial-reasoning. They concluded that music enhanced brain functions that were required for learning mathematics, science and engineering (Brust, 2003). Several studies have suggested that beginning music training early corresponds to greater growth in certain areas of the brain (Schlang et al, 2003). For example, researchers in Germany identified the planum temporale, a part of the left hemisphere as the region of the brain responsible for the perfect pitch and speech. This term used magnetic resonance imaging (MRI) to look at the planun temporale in non-musicians and professional musicians, some with perfect pitch and some without it. They discovered that the planum temporale in those with perfect pitch was twice as large as the other groups. Also with perfect pitch has started a music lesson before age seven. Rauscher et al. (1997) found that musicians had thicker nerve fibers in the corpus callosum, the part of the brain that carries signals between the two hemispheres, if they started keyboard training before the age of seven. Babo (2001) discussed, researchers, work at the University of Konstanz in Germany which focused that exposure to music helped to rewire neural circuits. They concluded that the brains of pianists were more efficient at making skilled movements than the brains of others. These findings suggested that musical training could enhance brain function (Trainor and Schmidt, 2003). Schlaug et al. (1995) used MRI to discover that musicians who started studying music before the age of 7 had regions in their brains (the corpus callosum and the right motor cortex) that were larger than corresponding regions in both non-musicians and musicians whose training began at a later age. However, in response to questions about his study, Schlaug et al preferred not to recommend when music should be taught, since some very skilled musicians began performing in their twenties or thirties. Schlaug et al. also reported that most musicians who have perfect pitch started music lessons before the age of seven. However, according to Diamond and Hopson (1998), â€Å"early music training is associated with more growth in this one particular brain region†¦. if training starts later or is absent altogether, perfect pitch rarely shows up† (p. 4). Zatorre (2003) reported evidence that infants are born with nervous systems devoted exclusively to music. Studies are showing that early and ongoing musical training can help organize and develop children’s brains. In a study to determine the effect of systematic prenatal musical stimulation by observing musical behaviors exhibited between birth and 6, Fujioka et al (2006) found that infants who received systematic prenatal musical stimulation exhibited â€Å"remarkable attention behaviors.   Those infants could imitate accurately sounds made by adults (including non-family members), and appear to structure vocalization much earlier than infants who did not have prenatal musical training† (p. 21).   Only quite the researches focused on the prenatal musical training of the fetus. Personal Reflection I believe that musicians have more active contribution to brain development because they are required to perform in more complex sequences of finger movements. Musicians are regularly adapting to decisions on tempo, tone, style, rhythm, phrasing and feeling-training the brain to become incredibly good at organizing and performing a lot of activities all at the same time. Musicians in my point of view, exercise orchestration that have better payoff for lifelong attention skills, intelligence and skills in self-knowledge and self-expression. In my own opinion, there is a significant relationship between music and brain development. There is an interrelationship between music and education because of the eight basic intelligences:   linguistic; logical-mathematical; spatial; bodily-kinesthetic; musical; interpersonal; intrapersonal; and naturalist. Although, these intelligences are different from musical intelligences:emotional, spiritual and cultural than the other kinds of intelligences. Most importantly, he assumed that music could help some organize the way they think and work by helping them develop in other areas, such as math, language, and spatial reasoning. Gardner criticized school districts that sacrificed music in children’s education, calling them â€Å"arrogant and ignorant about the value of music education† (p. 142). Essay 2-The Mozart Effect Rauscher et al. (1993) used the term Mozart effect to describe the results of their study on the relationship between music and spatial task performance. It is based on the ear’s role in the development of movement, balance, language and pre-verbal communication as well as the integration of neurological responses stimulated by music The Mozart effect also refers to the way music is used to enhance the quality of life. For example, music helps children in obtaining good health, education, and creativity (Cjabris, 1999).   Rauscher et al. (1997) gave a group of college students three 10-minute-long sets of standard IQ spatial reasoning tasks: listening to a Mozart sonata for two pianos, listening to a relaxation tape, and sitting through silence. The results showed that the individuals who listened to Mozart had a distinct advantage in spatial task performance. Steele et al (1999) noted that students performed better â€Å"on the abstract/spatial reasoning tests after listening to Mozart than after listening to either the relaxation tape or to nothing† (p. 2). Although conditions differed significantly between music, silence, and relaxation, Shaw and his colleagues were careful to qualify the study results. Although spatial reasoning test scores rose as a result of listening to Mozart’s piano sonata in D major (K488), the effects were temporary. Jenkins (2001) noted that â€Å"the enhancing effect of the music condition is temporary, and does not extend beyond the 10-15 minute period during which subjects were engaged in each spatial task† (Rauscher et al., 1993, p. 2). The authors posed several questions for further research: â€Å"Could varying the amount of listening time optimize the Mozart effect? Could listening to Mozart also enhance other intelligence measures such as short-term memory, verbal reasoning, and quantitative reasoning? Would other kinds of music have an effect on IQ performance† (p. 2)? Though the answers to these questions were unclear, the authors concluded that music lacking in complexity failed to enhance performance. They also concluded that the complexity of Mozart’s music was responsible for its enhancing effect. Rauscher et al. replicated and extended these findings in 1995. They used the same tasks used in their first experiment but extended the types of listening examples used. College students were divided into 3 groups: those exposed to silence, the same Mozart music used in the 1993 study, and a piece by Philip Glass. As before, the Mozart group showed a significant increase in spatial IQ scores. Tomatis, a French physician, psychologist, and educator, researched the connection between early childhood development in the 1960s and the music of Mozart (Jenkins, 2001). College students listened to a Mozart sonata, then performed complicated visual tasks involving cutting and folding paper. However, there was no difference in the way these tasks were performed by either the students who listened to the sonata or the control groups who just relaxed before taking the test or listened to other kinds of music. Schellenberg (2006) pointed out that the studies on music instruction insubstantial overall because researchers only tried to repeat and extend their findings. For example, no one knew exactly which kind of musical training produced results and which kinds did not, who benefited most from it, and how long any intellectual gains resulting from music training lasted. In another study, Chabris (1999) reviewed previous studies and compared the effects of the Mozart recordings. Results revealed a statistically insignificant increase in the ability of individuals to complete tasks requiring spatial visualization skills and abstract reasoning. Chabris noted that â€Å"if listening to Mozart improves cognitive performance at all, it’s by improving overall cognitive arousal and concentration. It shouldn’t be viewed as an intellectual miracle drug† (p. 1). Steele (2001) agreed with Chabris, by stating that â€Å"there is a problem with the concept of classical music as Gatorade for the brain† (p. 1). A number of other researchers (Crncec et al, 2006) supported the belief that classical music does not increase basic intelligence. Rauscher, et l (1995) noted that because many researchers only measured the effect on general intelligence instead of on spatial-temporal abilities, they failed when they tried to repeat the original experiment. In 1995, Rauscher et al. replicated this study and again found that spatial-temporal reasoning improved after listening to the Mozart Sonata. Though daily exposure to Mozart’s music produced daily increases in scores, this effect did not apply to all styles of music or to all areas of intelligence. For example, Phillip Glass’ minimalist music did not enhance spatial-temporal reasoning. Further, the students’ scores did not improve when they performed a short-term memory task after listening to Mozart. Rauscher et al. (1999) concluded that â€Å"although the Mozart effect is intriguing and holds great promise for further explorations into the transfer of musical processing to other domains of reasoning, merely listening to music probably does not lead to lasting enhancement of spatial-temporal intelligence. Listening to music is a passive experience for most people, and does not require the involvement that actively creating music does† (p. 2).   This observation led researchers to suspect that actively creating music has greater benefits for spatial temporal intelligence than simply listening to it. Combining separate elements of an object into a whole or arranging them in a specific order are spatial-temporal operations. They require successive steps, which are dependent upon previous steps. Spatial-logical operations also require recognition of similarities or differences among objects and are generally one-step processes. For example, a child who is asked to classify objects according to their color or shape would be performing a spatial-logical operation. The Rauscher et al. (1999) model predicted that music training may increase spatial-temporal task scores, but not necessarily spatial-logical tasks. These studies did suggest casual relationships between music and spatial task performance. The authors concluded that music education was helpful for maximum cognitive development by demonstrating that music could improve the intellectual functioning of children. Personal Reflection In my own opinion, the study in Mozart effect is a new proof of music’s education and its importance. Since it is believed to development a child’s IQ, schools must offer music programs to help their students in a very substantial way. Music educators should work towards the inclusion of music education in the curriculum of public education. Also, the public’s perception of music education must be altered so that policymakers in education are forced to provide for conditions where music education may thrive. Many educators and researchers posit that music should be a more central part of   the school curriculum in light of studies that demonstrate a relationship between music and intellectual growth. Also, tentative research findings in support of music education have shown that people believe that there is an essential value to learning about music. Diamond (1998) argued that learning to play an instrument could increase a child’s capacity for â€Å"voluntary attention† (p. 7), while Porter (1998) concluded that music can teach â€Å"discipline, care, concentration, and perseverance† (p. 7). Music Learning and Memory for Music When memory for a sequence of visually presented letters is tested, the marked recency effect that characterizes studies of the PAS system is absent. Nonetheless, clear evidence of phonological coding is found in the form of a marked effect of phonological similarity ( Schlkind et al, 2003). auditory input. Further evidence for the interaction between self-generated phonological codes and auditory input is, of course, offered by the irrelevant speech effect. Performance is impaired by unwanted spoken material, with the crucial feature of the material being its phonological rather than its semantic characteristics, again suggesting that the interaction is occurring at a common phonological level ( Dowling, 1994). It should be pointed out at this stage, however, that the nature of the irrelevant sound is crucial. While speech in a foreign language is quite disruptive to performance, white noise is not, even when the intensity of the noise is pulsed so as to resemble the intensity envelope of the speech signal that has been shown to disrupt memory ( Dowling et al, 1995). The fact that memory is more disrupted by vocal than by nonvocal music might seem to suggest that the system is essentially speech based. It is possible, however, that the greater disruption by speech reflects the nature of the primary task, namely remembering digits, a task that is likely to operate principally in terms of the spoken names of the digits. It is entirely conceivable that a different primary task would lead to a different degree of disruption. One possibility then might be to look at studies investigating memory for environmental sounds. Unfortunately, the evidence in this area seems to be relatively sparse. Deutsch (2004) showed that their patient was better at remembering environmental sounds than spoken digits, but, unfortunately, it is possible that the task was done by first identifying the sounds and then remembering them semantically. Personal Reflection . Thinking of music memory as schematic is probably accurate for many of the interactions that both trained and untrained people have with music. However, recently I have become interested in the nature of representation when memory for music is essentially perfect. Whereas it appears that the majority of work in music cognition has examined short-term memory, I would like to examine longterm memory. By this I mean that I am interested in the way well-learned music is represented. People are able to remember a large repertory of music and retain it for many years. What kinds of codes make this retention possible? Clearly, proposing verbal codes in the traditional sense is impractical when trying to understand memory for melody (as opposed to the lyrics in vocal music). Even if we assume that a small minority of musicians can encode tunes in terms of musical structure, motor commands, or musical notation, the successful retention of music by untrained people suggests the existence of other types of durable codes. The explication of those codes has been the goal of my current program of research References    Blood, A., & Zatorre, R. (2001). Intensely pleasurable responses to music correlate with activity in brain regions implicated in reward and emotion. Proceedings of the National Academy of Sciences,98, 11818-11823. Brust, J. (2003). Music and the neurologist: A historical perspective. In I.Peretz, & R. Zatorre (Eds.) The cognitive neuroscience of music (pp. 181-191). New York: Oxford University Press. Chabris, C (1999). Prelude or requiem for the ‘Mozart effect’? Nature, 400, 6747, 826-7. Crncec, R., Wilson, S., & Prior, M. (2006). No evidence for the Mozart effect in children. Music Perception, 23(4), 305- 317. Deutsch, D. (2004). The octave illusion revisited again. Journal of Experimental Psychology: Human Perception and Performance, 30 (2), 355-364. This article can be downloaded from Psych Info and from the author’s web page. Dowling, W. J. (1994). Melodic contour in hearing and remembering melodies. In R. Aiello (Ed.) Musical perceptions, (pp. 173-190 ). New York: Oxford University Press. Dowling, W. J. , Kwak, S., & Andrews, M. ( 1995). The time course of recognition of novel melodies. Perception & Psychophysics, 57(2), 136-49. Fujioka, T., Ross, B., Kakigi, R., Pantev, C., & Trainor, L. (2006). One year of musical training affects development of auditory cortical-evoked fields in young children. Brain, 129, 2593-2608. This article can be downloaded. Jenkins, J.S. (2001). The Mozart effect. Journal of the Royal Society of Medicine,   94,170-172. Patel, A. (2003). Language, music, syntax and the brain. Nature Neuroscience, 6(7), 674-681. This article can be downloaded. discuss it from the neuroscientific perspective. Peretz, I., & Zatorre, R. (2005). Brain organization for music processing. Annual Review of Psychology, 56, 89-114. This article can be downloaded. This is an excellent review. Rauschecker, J. (2003). Functional organization and plasticity of auditory cortex. In Peretz, I., & Zatorre, R. (Eds.) The cognitive neuroscience of music (pp. (357-365). New York: Oxford University Press. Rauscher, F. (1999). Reply to Prelude or requiem for the â€Å"Mozart effect’? Nature, 400, 6747, 827-8. Schellenberg, E. G.(2005). Music and cognitive abilities. Current Directions in Psychological Science, 14 (6), 317-320. This article can be downloaded. Schellenberg, E.G. (2006). Long-term positive association between music lessons and IQ. Journal of Education Psychology, 98 (2), 457-468. This article can be downloaded. Schlaug, G. ( 2003). The brain of musicians. In Peretz, I., & Zatorre, R. (Eds.) The cognitive neuroscience of music (pp. (366-381). New York: Oxford University Press. Schulkind, A., Posner, R., & Rubin, D. (2003). Musical features that facilitate melody identification: How do you know it’s â€Å"your† song when they finally play it? Music Perception, 21, (2), 217-249. Steele, K., Dalla Bella, S., Peretz, I., Dunlop, T., Dawe, L., Humphrey, K., Shannon, R., Kirby, J. Jr., & Olmstead, C. (1999). Prelude or requiem for the ‘Mozart effect’? Nature, 400, 6747,826-7. Trainor, L., & Schmidt, L. (2003). Processing emotions induced by music. In I. Peretz, & R. Zatorre (Eds.) The cognitive neuroscience of music (pp. 310-324). New York: Oxford University Press. Zatorre, R. (2003). Absolute pitch: A model for understanding the influence of genes and development on neural and cognitive function. Nature Neuroscience, 6 (7), pp. 692-695.   

Sunday, November 10, 2019

Europe Economic Crisis

ISSN 0379-0991 Economic Crisis in Europe: Causes, Consequences and Responses EUROPEAN ECONOMY 7|2009 EUROPEAN COMMISSION The European Economy series contains important reports and communications from the Commission to the Council and the Parliament on the economic situation and developments, such as the Economic forecasts, the annual EU economy review and the Public ? nances in EMU report. Subscription terms are shown on the back cover and details on how to obtain the list of sales agents are shown on the inside back cover.Unless otherwise indicated, the texts are published under the responsibility of the Directorate-General for Economic and Financial Affairs of the European Commission, BU24, B-1049 Brussels, to which enquiries other than those related to sales and subscriptions should be addressed. LEGAL NOTICE Neither the European Commission nor any person acting on its behalf may be held responsible for the use which may be made of the information contained in this publication, or for any errors which, despite careful preparation and checking, may appear.More information on the European Union is available on the Internet (http://europa. eu). Cataloguing data can be found at the end of this publication. Luxembourg: Of? ce for Of? cial Publications of the European Communities, 2009 ISBN 978-92-79-11368-0 doi 10. 2765/845 40  © European Communities, 2009 Reproduction is authorised provided the source is acknowledged. Printed in Luxembourg European Commission Directorate-General for Economic and Financial Affairs Economic Crisis in Europe: Causes, Consequences and ResponsesEUROPEAN ECONOMY 7/2009 FOREWORD The European economy is in the midst of the deepest recession since the 1930s, with real GDP projected to shrink by some 4% in 2009, the sharpest contraction in the history of the European Union. Although signs of improvement have appeared recently, recovery remains uncertain and fragile. The EU’s response to the downturn has been swift and decisive. A side from intervention to stabilise, restore and reform the banking sector, the European Economic Recovery Plan (EERP) was launched in December 2008.The objective of the EERP is to restore confidence and bolster demand through a coordinated injection of purchasing power into the economy complemented by strategic investments and measures to shore up business and labour markets. The overall fiscal stimulus, including the effects of automatic stabilisers, amounts to 5% of GDP in the EU. According to the Commission's analysis, unless policies take up the new challenges, potential GDP in the EU could fall to a permanently lower trajectory, due to several factors. First, protracted spells of unemployment in the workforce tend to lead to a permanent loss of skills.Second, the stock of equipment and infrastructure will decrease and become obsolete due to lower investment. Third, innovation may be hampered as spending on research and development is one of the first outlays that businesses cu t back on during a recession. Member States have implemented a range of measures to provide temporary support to labour markets, boost investment in public infrastructure and support companies. To ensure that the recovery takes hold and to maintain the EU’s growth potential in the long-run, the focus must increasingly shift from short-term demand management to supply-side structural measures.Failing to do so could impede the restructuring process or create harmful distortions to the Internal Market. Moreover, while clearly necessary, the bold fiscal stimulus comes at a cost. On the current course, public debt in the euro area is projected to reach 100% of GDP by 2014. The Stability and Growth Pact provides the flexibility for the necessary fiscal stimulus in this severe downturn, but consolidation is inevitable once the recovery takes hold and the risk of an economic relapse has diminished sufficiently.While respecting obligations under the Treaty and the Stability and Growth Pact, a differentiated approach across countries is appropriate, taking into account the pace of recovery, fiscal positions and debt levels, as well as the projected costs of ageing, external imbalances and risks in the financial sector. Preparing exit strategies now, not only for fiscal stimulus, but also for government support for the financial sector and hard-hit industries, will enhance the effectiveness of these measures in the short term, as this depends upon clarity regarding the pace with which such measures will be withdrawn.Since financial markets, businesses and consumers are forward-looking, expectations are factored into decision making today. The precise timing of exit strategies will depend on the strength of the recovery, the exposure of Member States to the crisis and prevailing internal and external imbalances. Part of the fiscal stimulus stemming from the EERP will taper off in 2011, but needs to be followed up by sizeable fiscal consolidation in following years to reverse the unsustainable debt build-up.In the financial sector, government guarantees and holdings in financial institutions will need to be gradually unwound as the private sector gains strength, while carefully balancing financial stability with competitiveness considerations. Close coordination will be important. ‘Vertical’ coordination between the various strands of economic policy (fiscal, structural, financial) will ensure that the withdrawal of government measures is properly sequenced — an important consideration as turning points may differ across policy areas. Horizontal’ coordination between Member States will help them to avoid or manage cross-border economic spillover effects, to benefit from shared learning and to leverage relationships with the outside world. Moreover, within the euro area, close coordination will ensure that Member States’ growth trajectories do not diverge as the economy recovers. Addressing the underlying cause s of diverging competitiveness must be an integral part of any exit strategy.The exit strategy should also ensure that Europe maintains its place at the frontier of the low-carbon revolution by investing in renewable energies, low carbon technologies and â€Å"green† infrastructure. The aim of this study is to provide the analytical underpinning of such a coordinated exit strategy. Marco Buti Director-General, DG Economic and Financial Affairs, European Commission ABBREVIATIONS AND SYMBOLS USED Member States BE BG CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK EA-16 EU-10 EU-15 EU-25 EU-27 Currencies EUR BGN CZK DKK EEK GBP HUF JPY LTL LVL PLN RON SEKBelgium Bulgaria Czech Republic Denmark Germany Estonia Greece Spain France Ireland Italy Cyprus Latvia Lithuania Luxembourg Hungary Malta The Netherlands Austria Poland Portugal Romania Slovenia Slovakia Finland Sweden United Kingdom European Union, Member States having adopted the single currency (BE , DE, EL, SI, SK, ES, FR, IE, IT, CY, LU, MT, NL, AT, PT and FI) European Union Member States that joined the EU on 1 May 2004 (CZ, EE, CY, LT, LV, HU, MT, PL, SI, SK) European Union, 15 Member States before 1 May 2004 (BE, DK, DE, EL, ES, FR, IE, IT, LU, NL, AT, PT, FI, SE and UK) European Union, 25 Member States before 1 January 2007 European Union, 27 Member States euro New Bulgarian lev Czech koruna Danish krone Estonian kroon Pound sterling Hungarian forint Japanese yen Lithuanian litas Latvian lats New Polish zloty New Romanian leu Swedish krona iv SKK USD Slovak koruna US dollar Other abbreviations BEPG Broad Economic Policy Guidelines CESR Committee of European Securities Regulators EA Euro area ECB European Central Bank ECOFIN European Council of Economics and Finance Ministers EDP Excessive deficit procedure EMU Economic and monetary union ERM II Exchange Rate Mechanism, mark II ESCB European System of Central Banks Eurostat Statistical Office of the European Communities F DI Foreign direct investment GDP Gross domestic product GDPpc Gross Domestic Product per capita GLS Generalised least squares HICP Harmonised index of consumer prices HP Hodrick-Prescott filterICT Information and communications technology IP Industrial Production MiFID Market in Financial Instruments Directive NAWRU Non accelerating wage inflation rate of unemployment NEER Nominal effective exchange rate NMS New Member States OCA Optimum currency area OLS Ordinary least squares R Research and development RAMS Recently Acceded Member States REER Real effective exchange rate SGP Stability and Growth Pact TFP Total factor productivity ULC Unit labour costs VA Value added VAT Value added tax v ACKNOWLEDGEMENTS This special edition of the EU Economy: 2009 Review â€Å"Economic Crisis in Europe: Causes, Consequences and Responses† was prepared under the responsibility of Marco Buti, Director-General for Economic and Financial Affairs, and Istvan P. Szekely, Director for Economic St udies and Research. Paul van den Noord, Adviser in the Directorate for Economic Studies and Research, served as the global editor of the report.The report has drawn on substantive contributions by Ronald Albers, Alfonso Arpaia, Uwe Bower, Declan Costello, Jan in ‘t Veld, Lars Jonung, Gabor Koltay, Willem Kooi, Gert-Jan Koopman, Martin Hradisky, Julia Lendvai, Mauro Griorgo Marrano, Gilles Mourre, Michal Narozny, Moises Orellana Pena, Dario Paternoster, Lucio Pench, Stephanie Riso, Werner Roger, Eric Ruscher, Alessandra Tucci, Alessandro Turrini, Lukas Vogel and Guntram Wolff. The report benefited from extensive comments by John Berrigan, Daniel Daco, Oliver Dieckmann, Reinhard Felke, Vitor Gaspar, Lars Jonung, Sven Langedijk, Mary McCarthy, Matthias Mors, Andre Sapir, Massimo Suardi, Istvan P. Szekely, Alessandro Turrini, Michael Thiel and David Vergara. Statistical assistance was provided by Adam Kowalski, Daniela Porubska and Christopher Smyth. Adam Kowalski and Greta Haems were responsible for the lay-out of the report.Comments on the report would be gratefully received and should be sent, by mail or e-mail, to: Paul van den Noord European Commission Directorate-General for Economic and Financial Affairs Directorate for Economic Studies and Research Office BU-1 05-189 B-1049 Brussels E-mail: paul. [email  protected] europa. eu vi CONTENTS Executive Summary 1. 2. 3. A crisis of historic proportions Vast policy challenges A strong call on EU coordination 1 1 1 5 Part I: Anatomy of the crisis 1. Root causes of the crisis 1. 1. 1. 2. 1. 3. Introduction A chronology of the main events Global forces behind the crisis Introduction Great crises in the past The policy response then and now Lessons from the past 7 8 8 9 10 2. The crisis from a historical perspective 2. 1. 2. 2. 2. 3. 2. 4. 14 14 14 18 20 Part II: Economic consequences of the crisis 1. Impact on actual and potential growth 1. 1. 1. 2. 1. 3. 1. 4.Introduction The impact on economic activity A s ymmetric shock with asymmetric implications The impact of the crisis on potential growth Introduction Recent developments Labour market expectations A comparison with recent recessions Introduction Tracking developments in fiscal deficits Tracking public debt developments Fiscal stress and sovereign risk spreads Introduction Sources of global imbalances Global imbalances since the crisis Implications for the EU economy 23 24 24 24 27 30 2. Impact on labour market and employment 2. 1. 2. 2. 2. 3. 2. 4. 35 35 35 37 38 3. Impact on budgetary positions 3. 1. 3. 2. 3. 3. 3. 4. 41 41 41 43 44 4. Impact on global imbalances 4. 1. 4. 2. 4. 3. 4. 4. 46 46 46 48 50 Part III:Policy responses 1. A primer on financial crisis policies 1. 1. 1. 2. 1. 3. Introduction The EU crisis policy framework The importance of EU coordination 55 56 56 58 59 2. Crisis control and mitigation 62 vii 2. 1. 2. 2. 2. 3. 2. 4. Introduction Banking support Macroeconomic policies Structural policies Introduction Crisis resolution policies Crisis prevention Introduction The pursuit of crisis resolution The role of EU coordination 62 62 64 71 3. Crisis resolution and prevention 3. 1. 3. 2. 3. 3. 78 78 78 80 4. Policy challenges ahead 4. 1. 4. 2. 4. 3. 82 82 82 85 References 87 LIST OF TABLES II. 1. 1. II. 1. 2. III. 1. 1. III. 2. 1. III. 2. 2.Main features of the Commission forecast The Commission forecast by country Crisis policy frameworks: a conceptional illustration Public interventions in the banking sector Labour market and social protection measures in Member States' recovery programmes 71 27 27 58 63 LIST OF GRAPHS I. 1. 1. I. 1. 2. I. 1. 3. I. 1. 4. I. 1. 5. I. 1. 6. I. 1. 7. I. 2. 1. I. 2. 2. I. 2. 3. I. 2. 4. I. 2. 5. I. 2. 6. II. 1. 1. II. 1. 2. II. 1. 3. II. 1. 4. II. 1. 5. II. 1. 6. II. 1. 7. Projected GDP growth for 2009 Projected GDP growth for 2010 3-month interbank spreads vs T-bills or OIS Bank lending to private economy in the euro area, 2000-09 Corporate 10 year-spreads vs.Gove rnment in the euro area, 2000-09 Real house prices, 2000-09 Stock markets, 2000-09 GDP levels during three global crises World average of own tariffs for 35 countries, 1865-1996, un-weighted average, per cent of GDP World industrial output during the Great Depression and the current crisis The decline in world trade during the crisis of 1929-1933 The decline in world trade during the crisis of 2008-2009 Unemployment rates during the Great Depression and the present crisis in the US and Europe Bank lending standards Manufacturing PMI and world trade Quarterly growth rates in the EU Construction activity and current account position Growth composition in current account surplus countries Growth compostion of current account deficit countries Potential growth 2007-2013, euro area 18 24 24 27 29 30 30 31 15 16 16 16 8 8 9 10 10 12 12 15 viii II. 1. 8. II. 1. 9. II. 1. 10. II. 2. 1. II. 2. 2. II. 2. 3. II. 2. 4. II. 2. 5. II. 2. 6. II. 2. 7. II. 2. 8. II. 2. 9. II. 2. 10. II. 2. 11. II. 2. 12. II. 3. 1. II. 3. 2. II. 3. 3. II. 3. 4. II. 3. 5. II. 3. 6. II. 3. 7. II. 3. 8. II. 4. 1. II. 4. 2. II. 4. 3. II. 4. 4. II. 4. 5. III. 2. 1. III. 2. 2. III. 2. 3. III. 2. 4. III. 2. 5. III. 2. 6. III. 2. 7. III. 2. 8. III. 2. 9. III. 2. 10.Potential growth 2007-2013, euro outs Potential growth 2007-2013, most recently acceding Member States Potential growth by Member State Unemployment rates in the European Union Employment growth in the European Union Unemployment and unemployment expectations Unemployment and hours worked Change in monthly unemployment rate – Italy Unemployment expectations over next 12 months (Consumer survey) – Italy Change in monthly unemployment rate – Germany Unemployment expectations over next 12 months (Consumer survey) Germany Change in monthly unemployment rate – France Unemployment expectations over next 12 months (Consumer survey) – France Change in monthly unemployment rate – United Kingdom Unemployment expectations over next 12 months (Consumer survey) – United Kingdom Tracking the fiscal position against previous banking crises Change in fiscal position and employment in construction Change in fiscal position and real house prices Fiscal positions by Member State Tracking general government debt against previous banking crises Gross public debt Fiscal space by Member State, 2009 Fiscal space and risk premia on government bond yields Current account balances Trade balance in GCC countries and oil prices The US trade deficit The Euro Area trade balance China's GDP growth rate and current account to GDP ratio Macroeconomic policy mix in the euro area Macroeconomic policy mix in the United Kingdom Macroeconomic policy mix in the United States Central bank policy rates ECB policy and eurozone overnight rates Central bank balance sheets Fiscal stimulus in 2009 Fiscal stimulus in 2010 Output gap and fiscal stimulus in 2009 Fiscal space and fiscal stimulus in 2009 31 31 32 35 36 3 7 38 40 40 40 40 40 40 40 40 41 42 42 42 43 44 44 45 46 49 50 51 52 65 65 65 66 66 66 67 68 68 69 LIST OF BOXES I. 1. 1. I. 2. 1. II. 1. 1. II. 1. 2. II. 1. 3. II. 1. 4. II. 4. 1. III. 1. 1.Estimates of financial market losses Capital flows and the crisis of 1929-1933 and 2008-2009 Impact of credit losses on the real economy The growth impact of the current and previous crises Financial crisis and potential growth: econometric evidence Financial crisis and potential growth: evidence from simulations with QUEST Making sense of recent Chinese trade data. Concise calendar of EU policy actions 11 17 25 28 33 34 49 57 ix III. 2. 1. III. 2. 2. III. 2. 3. III. 2. 4. Measuring the economic impact of fiscal stimulus under the EERP EU balance of payments assistance Labour market and social protection crisis measures: examples of good practice EU-level financial contributions 70 73 76 77 x EXECUTIVE SUMMARY assively liquidated their positions and stock markets went into a tailspin. From then o nward the EU economy entered the steepest downturn on record since the 1930s. The transmission of financial distress to the real economy evolved at record speed, with credit restraint and sagging confidence hitting business investment and household demand, notably for consumer durables and housing. The cross-border transmission was also extremely rapid, due to the tight connections within the financial system itself and also the strongly integrated supply chains in global product markets. EU real GDP is projected to shrink by some 4% in 2009, the sharpest contraction in its history.And although signs of an incipient recovery abound, this is expected to be rather sluggish as demand will remain depressed due to deleveraging across the economy as well as painful adjustments in the industrial structure. Unless policies change considerably, potential output growth will suffer, as parts of the capital stock are obsolete and increased risk aversion will weigh on capital formation and R&D. The ongoing recession is thus likely to leave deep and long-lasting traces on economic performance and entail social hardship of many kinds. Job losses can be contained for some time by flexible unemployment benefit arrangements, but eventually the impact of rapidly rising unemployment will be felt, with downturns in housing markets occurring simultaneously affecting (notably highly-indebted) households.The fiscal positions of governments will continue to deteriorate, not only for cyclical reasons, but also in a structural manner as tax bases shrink on a permanent basis and contingent liabilities of governments stemming from bank rescues may materialise. An open question is whether the crisis will weaken the incentives for structural reform and thereby adversely affect potential growth further, or whether it will provide an opportunity to undertake far-reaching policy actions. 2. VAST POLICY CHALLENGES 1. A CRISIS OF HISTORIC PROPORTIONS The financial crisis that hit the global econ omy since the summer of 2007 is without precedent in post-war economic history. Although its size and extent are exceptional, the crisis has many features in common with similar financial-stress driven recession episodes in the past.The crisis was preceded by long period of rapid credit growth, low risk premiums, abundant availability of liquidity, strong leveraging, soaring asset prices and the development of bubbles in the real estate sector. Over-stretched leveraging positions rendered financial institutions extremely vulnerable to corrections in asset markets. As a result a turn-around in a relatively small corner of the financial system (the US subprime market) was sufficient to topple the whole structure. Such episodes have happened before (e. g. Japan and the Nordic countries in the early 1990s, the Asian crisis in the late-1990s). However, this time is different, with the crisis being global akin to the events that triggered the Great Depression of the 1930s.While it may be appropriate to consider the Great Depression as the best benchmark in terms of its financial triggers, it has also served as a great lesson. At present, governments and central banks are well aware of the need to avoid the policy mistakes that were common at the time, both in the EU and elsewhere. Large-scale bank runs have been avoided, monetary policy has been eased aggressively, and governments have released substantial fiscal stimulus. Unlike the experience during the Great Depression, countries in Europe or elsewhere have not resorted to protectionism at the scale of the 1930s. It demonstrates the importance of EU coordination, even if this crisis provides an opportunity for further progress in this regard.In its early stages, the crisis manifested itself as an acute liquidity shortage among financial institutions as they experienced ever stiffer market conditions for rolling over their (typically shortterm) debt. In this phase, concerns over the solvency of financial instituti ons were increasing, but a systemic collapse was deemed unlikely. This perception dramatically changed when a major US investment bank (Lehman Brothers) defaulted in September 2008. Confidence collapsed, investors The current crisis has demonstrated the importance of a coordinated framework for crisis management. It should contain the following building blocks: †¢ Crisis prevention to prevent a repeat in the future. This should be mapped onto a collective 1 European Commission Economic Crisis in Europe: Causes, Consequences and Responses udgment as to what the principal causes of the crisis were and how changes in macroeconomic, regulatory and supervisory policy frameworks could help prevent their recurrence. Policies to boost potential economic growth and competitiveness could also bolster the resilience to future crises. †¢ Crisis control and mitigation to minimise the damage by preventing systemic defaults or by containing the output loss and easing the social hardship stemming from recession. Its main objective is thus to stabilise the financial system and the real economy in the short run. It must be coordinated across the EU in order to strike the right balance between national preoccupations and spillover effects affecting other Member States. Crisis resolution to bring crises to a lasting close, and at the lowest possible cost for the taxpayer while containing systemic risk and securing consumer protection. This requires reversing temporary support measures as well action to restore economies to sustainable growth and fiscal paths. Inter alia, this includes policies to restore banks' balance sheets, the restructuring of the sector and an orderly policy ‘exit'. An orderly exit strategy from expansionary macroeconomic policies is also an essential part of crisis resolution. The beginnings of such a framework are emerging, building on existing institutions and legislation, and complemented by new initiatives.But of course policy makers in Europe have had no choice but to employ the existing mechanisms and procedures. A framework for financial crisis prevention appeared, with hindsight, to be underdeveloped – otherwise the crisis would most likely not have happened. The same held true to some extent for the EU framework for crisis control and mitigation, at least at the initial stages of the crisis. Quite naturally, most EU policy efforts to date have been in the pursuit of crisis control and mitigation. But first steps have also been taken to redesign financial regulation and supervision – both in Europe and elsewhere – with a view to crisis prevention. By contrast, the adoption of crisis resolution policies has not begun in earnest yet.This is now becoming urgent – not least because it should underpin the effectiveness of control policies via its impact on confidence. 2. 1. Crisis control and mitigation Aware of the risk of financial and economic meltdown central banks and governments in the European Union embarked on massive and coordinated policy action. Financial rescue policies have focused on restoring liquidity and capital of banks and the provision of guarantees so as to get the financial system functioning again. Deposit guarantees were raised. Central banks cut policy interest rates to unprecedented lows and gave financial institutions access to lender-of-last-resort facilities.Governments provided liquidity facilities to financial institutions in distress as well, along with state guarantees on their liabilities, soon followed by capital injections and impaired asset relief. Based on the coordinated European Economy recovery Plan (EERP), a discretionary fiscal stimulus of some 2% of GDP was released – of which two-thirds to be implemented in 2009 and the remainder in 2010 – so as to hold up demand and ease social hardship. These measures largely respected agreed principles of being timely and targeted, although there are concerns that in some cases measures were not of a temporary nature and therefore not easily reversed.In addition, the Stability and Growth Pact was applied in a flexible and supportive manner, so that in most Member States the automatic fiscal stabilisers were allowed to operate unfettered. The dispersion of fiscal stimulus across Member States has been substantial, but this is generally – and appropriately – in line with differences in terms of their needs and their fiscal room for manoeuvre. In addition, to avoid unnecessary and irreversible destruction of (human and entrepreneurial) capital, support has been provided to hard-hit but viable industries while part-time unemployment claims were allowed on a temporary basis, with the EU taking the lead in developing guidelines on the design of labour market policies during the crisis.The EU has played an important role to provide guidance as to how state aid policies – including to the financial sector – could be shaped so as to pay respect to competition rules. Moreover, the EU has provided balance-of payments assistance jointly with the IMF and World Bank to Member States in Central and Eastern Europe, as these have been exposed to reversals of international capital flows. 2 Executive Summary Finally, direct EU support to economic activity was provided through substantially increased loan support from the European Investment Bank and the accelerated disbursal of structural funds. These crisis control policies are largely achieving their objectives.Although banks' balance sheets are still vulnerable to higher mortgage and credit default risk, there have been no defaults of major financial institutions in Europe and stock markets have been recovering. With short-term interest rates near the zero mark and ‘non-conventional' monetary policies boosting liquidity, stress in interbank credit markets has receded. Fiscal stimulus proves relatively effective owing to the liquidity and credit constraints fa cing households and businesses in the current environment. Economic contraction has been stemmed and the number of job losses contained relative to the size of the economic contraction. 2. 2. Crisis resolution ontext, the reluctance of many banks to reveal the true state of their balance sheets or to exploit the extremely favourable earning conditions induced by the policy support to repair their balance sheets is of concern. It is important as well that financial repair be done at the lowest possible long-term cost for the tax payer, not only to win political support, but also to secure the sustainability of public finances and avoid a long-lasting increase in the tax burden. Financial repair is thus essential to secure a satisfactory rate of potential growth – not least also because innovation depends on the availability of risk financing. †¢ Macroeconomic policies. Macroeconomic stimulus – both monetary and fiscal – has been employed extensively.The chal lenge for central banks and governments now is to continue to provide support to the economy and the financial sector without compromising their stability-oriented objectives in the medium term. While withdrawal of monetary stimulus still looks some way off, central banks in the EU are determined to unwind the supportive stance of monetary policies once inflation pressure begins to emerge. At that point a credible exit strategy for fiscal policy must be firmly in place in order to pre-empt pressure on governments to postpone or call off the consolidation of public finances. The fiscal exit strategy should spell out the conditions for stimulus withdrawal and must be credible, i. e. ased on pre-committed reforms of entitlements programmes and anchored in national fiscal frameworks. The withdrawal of fiscal stimulus under the EERP will be quasi automatic in 2010-11, but needs to be followed up by very substantial – though differentiated across Member States – fiscal conso lidation to reverse the adverse trends in public debt. An appropriate mix of expenditure restraint and tax increases must be pursued, even if this is challenging in an environment where distributional conflicts are likely to arise. The quality of public finances, including its impact on work incentives and economic efficiency at large, is an overarching concern. †¢ Structural policies.Even prior to the financial crisis, potential output growth was expected to roughly halve to as little as around 1% by the While there is still major uncertainty surrounding the pace of economic recovery, it is now essential that exit strategies of crisis control policies be designed, and committed to. This is necessary both to ensure that current actions have the desired effects and to secure macroeconomic stability. Having an exit strategy does not involve announcing a fixed calendar for the next moves, but rather defines those moves, including their direction and the conditions that must be sat isfied for making them. Exit strategies need to be in place for financial, macroeconomic and structural policies alike: †¢ Financial policies.An immediate priority is to restore the viability of the banking sector. Otherwise a vicious circle of weak growth, more financial sector distress and ever stiffer credit constraints would inhibit economic recovery. Clear commitments to restructure and consolidate the banking sector should be put in place now if a Japan-like lost decade is to be avoided in Europe. Governments may hope that the financial system will grow out of its problems and that the exit from banking support would be relatively smooth. But as long as there remains a lack of transparency as to the value of banks' assets and their vulnerability to economic and financial developments, uncertainty remains. In this 3European Commission Economic Crisis in Europe: Causes, Consequences and Responses 2020s due to the ageing population. But such low potential growth rates are li kely to be recorded already in the years ahead in the wake of the crisis. As noted, it is important to decisively repair the longer-term viability of the banking sector so as to boost productivity and potential growth. But this will not suffice and efforts are also needed in the area of structural policy proper. A sound strategy should include the exit from temporary measures supporting particular sectors and the preservation of jobs, and resist the adoption or expansion of schemes to withdraw labour supply.Beyond these defensive objectives, structural policies should include a review of social protection systems with the emphasis on the prevention of persistent unemployment and the promotion of a longer work life. Further labour market reform in line with a flexicuritybased approach may also help avoid the experiences of past crises when hysteresis effects led to sustained period of very high unemployment and the permanent exclusion of some from the labour force. Product market ref orms in line with the priorities of the Lisbon strategy (implementation of the single market programme especially in the area of services, measures to reduce administrative burden and to promote R and innovation) will also be key to raising productivity and creating new employment opportunities.The transition to a low-carbon economy should be pursued through the integration of environmental objectives and instruments in structural policy choices, notably taxation. In all these areas, policies that carry a low budgetary cost should be prioritised. 2. 3. Crisis prevention particular in China, into the world economy. This prompted accommodative monetary and fiscal policies. Buoyant financial conditions also had microeconomic roots and these tended to interact with the favourable macroeconomic environment. The list of contributing factors is long, including the development of complex – but poorly supervised – financial products and excessive short-term risk-taking.Crisis p revention policies should tackle these deficiencies in order to avoid repetition in the future. There are again agendas for financial, macroeconomic and structural policies: †¢ Financial policies. The agenda for regulation and supervision of financial markets in the EU is vast. A number of initiatives have been taken already, while in some areas major efforts are still needed. Action plans have been put forward by the EU to strengthen the regulatory framework in line with the G20 regulatory agenda. With the majority of financial assets held by cross-border banks, an ambitious reform of the European system of supervision, based on the recommendations made by the High-Level Group chaired by Mr Jacques de Larosiere, is under discussion.Initiatives to achieve better remuneration policies, regulatory coverage of hedge funds and private equity funds are being considered but have yet to be legislated. In many other areas progress is lagging. Regulation to ensure that enough provisions and capital be put aside to cope with difficult times needs to be developed, with accounting frameworks to evolve in the same direction. A certain degree of commonality and consistency across the rule books in Member States is important and a single regulatory rule book, as soon as feasible, desirable. It is essential that a robust and effective bank stabilisation and resolution framework is developed to govern what happens when supervision fails, including effective deposit protection.Consistency and coherence across the EU in dealing with problems in such institutions is a key requisite of a much improved operational and regulatory framework within the EU. †¢ Macroeconomic policies. Governments in many EU Member States ran a relatively A broad consensus is emerging that the ultimate causes of the crisis reside in the functioning of financial markets as well as macroeconomic developments. Before the crisis broke there was a strong belief that macroeconomic instability had bee n eradicated. Low and stable inflation with sustained economic growth (the Great Moderation) were deemed to be lasting features of the developed economies.It was not sufficiently appreciated that this owed much to the global disinflation associated with the favourable supply conditions stemming from the integration of surplus labour of the emerging economies, in 4 Executive Summary accommodative fiscal policy in the ‘good times' that preceded the crisis. Although this cannot be seen as the main culprit of the crisis, such behaviour limits the fiscal room for manoeuvre to respond to the crisis and can be a factor in producing a future one – by undermining the longer-term sustainability of public finances in the face of aging populations. Policy agendas to prevent such behaviour should thus be prominent, and call for a stronger coordinating role for the EU alongside the adoption of credible national medium-term frameworks.Intra-area adjustment in the Economic and Monetary Union (which constitutes two-thirds of the EU) will need to become smoother in order to prevent imbalances and the associated vulnerabilities from building up. This reinforces earlier calls, such as in the Commission's [email  protected] report (European Commission, 2008a), to broaden and deepen the EU surveillance to include intra-area competitiveness positions. †¢ Structural policies. Structural reform is among the most powerful crisis prevention policies in the longer run. By boosting potential growth and productivity it eases the fiscal burden, facilitates deleveraging and balance sheet restructuring, improves the political economy conditions for correcting cross-country imbalances, makes income redistribution issues less onerous and eases the terms of the inflation-output trade-off.Further financial development and integration can help to improve the effectiveness of and the political incentives for structural reform. at the Heads of State Level in the autumn of 2008 â €“ for the first time in history also of the Eurogroup – to coordinate these moves. The Commission's role at that stage was to provide guidance so as to ensure that financial rescues attain their objectives with minimal competition distortions and negative spillovers. Fiscal stimulus also has cross-border spillover effects, through trade and financial markets. Spillover effects are even stronger in the euro area via the transmission of monetary policy responses.The EERP adopted in November 2008, which has defined an effective framework for coordination of fiscal stimulus and crisis control policies at large, was motivated by the recognition of these spillovers. †¢ At the crisis resolution stage a coordinated approach is necessary to ensure an orderly exit of crisis control policies across Member States. It would not be envisaged that all Member State governments exit at the same time (as this would be dictated by the national specific circumstances). But it would be important that state aid for financial institutions (or other severely affected industries) not persist for longer than is necessary in view of its mplications for competition and the functioning of the EU Single Market. National strategies for a return to fiscal sustainability should be coordinated as well, for which a framework exists in the form of the Stability and Growth Pact which was designed to tackle spillover risks from the outset. The rationales for the coordination of structural policies have been spelled out in the Lisbon Strategy and apply also to the exits from temporary intervention in product and labour markets in the face of the crisis. †¢ At the crisis prevention stage the rationale for EU coordination is rather straightforward in view of the high degree of financial and economic integration.For example, regulatory reform geared to crisis prevention, if not coordinated, can lead to regulatory arbitrage that will affect location choices of institutions and may change the direction of international capital flows. Moreover, with many financial institutions operating cross border there is a 3. A STRONG CALL ON EU COORDINATION The rationale for EU coordination of policy in the face of the financial crisis is strong at all three stages – control and mitigation, resolution and prevention: †¢ At the crisis control and mitigation stage, EU policy makers became acutely aware that financial assistance by home countries of their financial institutions and unilateral extensions of deposit guarantees entail large and potentially disrupting spillover effects. This led to emergency summits of the European Council 5European Commission Economic Crisis in Europe: Causes, Consequences and Responses clear case for exchange of information and burden sharing in case of defaults. The financial crisis has clearly strengthened the case for economic policy coordination in the EU. By coordinating their crisis policies Member States heighten the credibi lity of the measures taken, and thus help restore confidence and support the recovery in the short term. Coordination can also be crucial to fend off protectionism and thus serves as a safeguard of the Single Market. Moreover, coordination is necessary to ensure a smooth functioning of the euro area where spillovers of national policies are particularly strong.And coordination provides incentives at the national level to implement growth friendly economic policies and to orchestrate a return to fiscal sustainability. Last but not least, coordination of external policies can contribute to a more rapid global solution of the financial crisis and global recovery. EU frameworks for coordination already exist in many areas and could be developed further in some. In several areas the EU has a direct responsibility and thus is the highest authority in its jurisdiction. This is the case for notably monetary policy in the euro area, competition policy and trade negotiations in the framework of the DOHA Round. This is now proving more useful than ever. In other areas, ‘bottom-up' EU coordination frameworks have been developed and should be exploited to the full.The pursuit of the regulatory and supervisory agenda implies the set-up of a new EU coordination framework which was long overdue in view of the integration of financial systems. An important framework for coordination of fiscal policies exists under the aegis of the Stability and Growth Pact. The revamped Lisbon strategy should serve as the main framework for coordination of structural policies in the EU. The balance of payment assistance provided by the EU is another area where a coordination framework has been established recently, and which could be exploited also for the coordination of policies in the pursuit of economic convergence. At the global level, finally, the EU can offer a framework for the coordination of positions in e. g. the G20 or the IMF.With the US adopting its own exit strategy, press ure to raise demand elsewhere will be mounting. The adjustment requires that emerging countries such as China reduce their national saving surplus and changed their exchange rate policy. The EU will be more effective if it also considers how policies can contribute to more balanced growth worldwide, by considering bolstering progress with structural reforms so as to raise potential output. In addition, the EU would facilitate the pursuit of this agenda by leveraging the euro and participating on the basis of a single position. 6 Part I Anatomy of the crisis 1. 1. 1. ROOT CAUSES OF THE CRISIS INTRODUCTIONThe depth and breath of the current global financial crisis is unprecedented in post-war economic history. It has several features in common with similar financial-stress driven crisis episodes. It was preceded by relatively long period of rapid credit growth, low risk premiums, abundant availability of liquidity, strong leveraging, soaring asset prices and the development of bubbles in the real estate sector. Stretched leveraged positions and maturity mismatches rendered financial institutions very vulnerable to corrections in asset markets, deteriorating loan performance and disturbances in the wholesale funding markets. Such episodes have happened before and the examples are abundant (e. g.Japan and the Nordic countries in the early 1990s, the Asian crisis in the late-1990s). But the key difference between these earlier episodes and the current crisis is its global dimension. When the crisis broke in the late summer of 2007, uncertainty among banks about the creditworthiness of their counterparts evaporated as they had heavily invested in often very complex and opaque and overpriced financial products. As a result, the interbank market virtually closed and risk premiums on interbank loans soared. Banks faced a serious liquidity problem, as they experienced major difficulties to rollover their short-term debt. At that stage, policymakers still perceived the c risis primarily as a liquidity problem.Concerns over the solvency of individual financial institutions also emerged, but systemic collapse was deemed unlikely. It was also widely believed that the European economy, unlike the US economy, would be largely immune to the financial turbulence. This belief was fed by perceptions that the real economy, though slowing, was thriving on strong fundamentals such as rapid export growth and sound financial positions of households and businesses. These perceptions dramatically changed in September 2008, associated with the rescue of Fannie Mae and Freddy Mac, the bankruptcy of Lehman Brothers and fears of the insurance giant AIG (which was eventually bailed out) taking down major US and EU financial institutions in its wake.Panic broke in stock markets, market valuations of financial institutions evaporated, investors rushed for the few safe havens that were seen to be left (e. g. sovereign bonds), and complete meltdown of the financial system b ecame a genuine threat. The crisis thus began to feed onto itself, with banks forced to restrain credit, economic activity plummeting, loan books deteriorating, banks cutting down credit further, and so on. The downturn in asset markets snowballed rapidly across the world. As trade credit became scarce and expensive, world trade plummeted and industrial firms saw their sales drop and inventories pile up. Confidence of both consumers and businesses fell to unprecedented lows. Graph I. 1. : Projected GDP growth for 2009 6 4 2 0 -2 -4 Nov-07 CF-NMS EC-NMS Jan-08 May-08 Mar-08 CF-UK EC-UK Jul-08 Sep-08 CF-EA EC-EA Nov-08 Jun-09 Aug-09 Aug-10 % -4. 0 -4. 3 Oct-09 Oct-10 -6 Feb-09 Sources: European Commission, Consensus Forecasts Graph I. 1. 2: Projected GDP growth for 2010 6 4 2 0 -2 -4 Nov-08 CF-NMS EC-NMS Jan-09 May-09 Mar-09 CF-UK EC-UK Jul-09 Sep-09 CF-EA EC-EA Dec-09 Feb-10 Jun-10 Apr-10 % -6 Sources: European Commission, Consensus Forecasts This set chain of events set the scene fo r the deepest recession in Europe since the 1930s. Projections for economic growth were revised downward at a record pace (Graphs I. 1. 1 and I. 1. 2).Although the contraction now seems to have bottomed, GDP is projected to fall in 2009 by the order of 4% in the euro area and the European Union as whole – with a modest pick up in activity expected in 2010. 8 Apr-09 Part I Anatomy of the crisis The situation would undoubtedly have been much more serious, had central banks, governments and supra-national authorities, in Europe and elsewhere, not responded forcefully (see Part III of this report). Policy interest rates have been cut sharply, banks have almost unlimited access to lender-oflast-resort facilities with their central banks, whose balance sheets expanded massively, and have been granted new capital or guarantees from their governments.Guarantees for savings deposits have been introduced or raised, and governments provided substantial fiscal stimulus. These actions giv e, however, rise to new challenges, notably the need to orchestrate a coordinated exit from the policy stimulus in the years ahead, along with the need to establish new EU and global frameworks for the prevention and resolution of financial crises and the management of systemic risk (see Part III). that point most observers were not yet alerted that systemic crisis would be a threat, but this began to change in the spring of 2008 with the failures of Bear Stearns in the United States and the European banks Northern Rock and Landesbank Sachsen.About half a year later, the list of (almost) failed banks had grown long enough to ring the alarm bells that systemic meltdown was around the corner: Lehman Brothers, Fannie May and Freddie Mac, AIG, Washington Mutual, Wachovia, Fortis, the banks of Iceland, Bradford & Bingley, Dexia, ABN-AMRO and Hypo Real Estate. The damage would have been devastating had it not been for the numerous rescue operations of governments. When in September 2008 L ehman Brothers had filed for bankruptcy the TED spreads jumped to an unprecedented high. This made investors even more wary about the risk in bank portfolios, and it became more difficult for banks to raise capital via deposits and shares. Institutions seen at risk could no longer finance themselves and had to sell assets at ‘fire sale prices' and restrict their lending.The prices of similar assets fell and this reduced capital and lending further, and so on. An adverse ‘feedback loop' set in, whereby the economic downturn increased the credit risk, thus eroding bank capital further. The main response of the major central banks – in the United States as well as in Europe (see Chapter III. 1 for further detail) – has been to cut official attributed to a common systemic factor (see for evidence Eichengreen et al. 2009). 1. 2. A CHRONOLOGY OF THE MAIN EVENTS The heavy exposure of a number of EU countries to the US subprime problem was clearly revealed in the s ummer of 2007 when BNP Paribas froze redemptions for three investment funds, citing its inability to value structured products. 1 ) As a result, counterparty risk between banks increased dramatically, as reflected in soaring rates charged by banks to each other for short-term loans (as indicated by the spreads — see Graph I. 1. 3). ( 2 ) At (1) See Brunnermeier (2009). (2) Credit default swaps, the insurance premium on banks' portfolios, soared in concert. The bulk of this rise can be Bps 500 400 300 200 100 0 Jan-00 Graph I. 1. 3: 3-month interbank spreads vs T-bills or OIS Default of Lehman Brothers BNP Paribas suspends the valuation of two mutual funds Jan-01 Jan-02 EUR Jan-03 Jan-04 USD Jan-05 Jan-06 JPY Jan-07 Jan-08 GBP Jan-09 Sources: Reuters EcoWin. 9 European Commission Economic Crisis in Europe: Causes, Consequences and Responses interest rates to historical lows so as to contain funding cost of banks.They also provided additional liquidity against collateral in ord er to ensure that financial institutions do not need to resort to fire sales. These measures, which have resulted in a massive expansion of central banks' balance sheets, have been largely successful as three-months interbank spreads came down from their highs in the autumn of 2008. However, bank lending to the non-financial corporate sector continued to taper off (Graph I. 1. 4). Credit stocks have, so far, not contracted, but this may merely reflect that corporate borrowers have been forced to maximise the use of existing bank credit lines as their access to capital markets was virtually cut off (risk spreads on corporate bonds have soared, see Graph I. 1. 5). Graph I. 1. : Bank lending to private economy in the euro area, 2000-09 16 14 12 10 8 6 4 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: European Central Bank institutions incentives to sell to the government while giving taxpayers a reasonable expectation that they will benefit in the long run. Financial inst itutions which at the (new) market prices of toxic assets would be insolvent were recapitalised by the government. All these measures were aiming at keeping financial institutions afloat and providing them with the necessary breathing space to prevent a disorderly deleveraging. The verdict as to whether these programmes are sufficient is mixed (Chapter III. 1), but the order of asset relief provided seem to be roughly in line with banks' needs (see again Box I. 1. ). Graph I. 1. 5: Corporate 10 year-spreads vs. Government in the euro area, 2000-09 450 350 basis points 250 150 50 -50 Corp AAA rated Corp A rated Corp composite yield Corp AA rated Corp BBB rated y-o-y percentage change house purchases households Non-financial corporations -150 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: European Central Bank. 1. 3. GLOBAL FORCES BEHIND THE CRISIS Governments soon discovered that the provision of liquidity, while essential, was not sufficient to restore a normal functionin g of the banking system since there was also a deeper problem of (potential) insolvency associated with undercapitalisation.The write-downs of banks are estimated to be over 300 billion US dollars in the United Kingdom (over 10% of GDP) and in the range of over EUR 500 to 800 billion (up to 10% of GDP) in the euro area (see Box I. 1. 1). In October 2008, in Washington and Paris, major countries agreed to put in place financial programmes to ensure capital losses of banks would be counteracted. Governments initially proceeded to provide new capital or guarantees on toxic assets. Subsequently the focus shifted to asset relief, with toxic assets exchanged for cash or safe assets such as government bonds. The price of the toxic assets was generally fixed between the fire sales price and the price at maturity to giveThe proximate cause of the financial crisis is the bursting of the property bubble in the United States and the ensuing contamination of balance sheets of financial instituti ons around the world. But this observation does not explain why a property bubble developed in the first place and why its bursting has had such a devastating impact also in Europe. One needs to consider the factors that resulted in excessive leveraged positions, both in the United States and in Europe. These comprise both macroeconomic and developments in the functioning of financial markets. ( 3 ) (3) See for instance Blanchard (2009), Bosworth and Flaaen (2009), Furceri and Mourougane (2009), Gaspar and Schinasi (2009) and Haugh et al. (2009). 10 Part I Anatomy of the crisis Box I. 1. 1: Estimates of financial market losses Estimates of financial sector osses are essential to inform policymakers about the severity of financial sector distress and the possible costs of rescue packages. There are several estimates quantifying the impact of the crisis on the financial sector, most recently those by the Federal Reserve in the framework of its Supervisory Capital Assessment Program, w idely referred to as the â€Å"stress test†. Using different methodologies, these estimates generally cover write-downs on loans and debt securities and are usually referred to as estimates of losses. The estimated losses during the past one and a half years or so have shown a steep increase, reflecting the uncertainty regarding the nature and the extent of the crisis.IMF (2008a) and Hatzius (2008) estimated the losses to US banks to about USD 945 in April 2008 and up to USD 868 million in September 2008, respectively. This is at the lower end of predictions by RGE monitor in February the same year which saw losses in the rage of USD 1 to 2 billion. The April 2009 IMF Global Financial Stability Report (IMF 2009a) puts loan and securities losses originated in Europe (euro area and UK) at USD 1193 billion and those originated in the United States at USD 2712 billion. However, the incidence of these losses by region is more relevant in order to judge the necessity and the extent of policy intervention. The IMF estimates write-downs of USD 316 billion for banks in the United Kingdom and USD 1109 billion (EUR 834 billion) for the euro area.The ECB's loss estimate for the euro area at EUR 488 billion is substantially lower than this IMF estimate, with the discrepancy largely due to the different assumptions about banks' losses on debt securities. Bank level estimates can be used in stress tests to evaluate capital adequacy of individual institutions and the banking sector at large. For example the Fed's Supervisory Capital Assessment Program found that 10 of the 19 banks examined needed to raise capital of USD 75 billion. Loss estimates can also inform policymakers about the effects of losses on bank lending and the magnitude of intervention needed to pre-empt this. Such calculations require additional assumptions about the capital banks can raise or generate through their profits as well as the amount of deleveraging needed.As an illustration the table below presents four scenarios that differ in their hypothetical recapitalisation rate and their deleveraging effects The IMF and ECB estimates of total write-downs for euro area banks are taken as starting points. Net write-downs are calculated, which reflect losses that are not likely to be covered either by raising capital or by tax deductions. Depending on the scenario net losses range between 219 and 406 billion EUR using the IMF estimate, and roughly half of that based on the ECB estimate. Such magnitudes would imply balance sheets decreases amounting to 7. 3% in the mildest scenario and 30. 8% in the worst case scenario (period between August 2007 and end of 2010). Capital recovery rates and deleveraging play a crucial role in determining the magnitude of the balance sheet effect.Governments' capital injections in the euro area have been broadly in line with the magnitude of these illustrative balance sheet effects, committing 226 billion EUR, half of which has been spent (see Chap ter III. 1). Table 1: Balance-sheet effects of write-downs in the euro area* Scenario (1) (2) (3) Capital 1760 1760 1760 Assets 31538 31538 31538 Estimated write-downs IMF 834 834 834 ECB 488 488 488 Recapitalisation rate 65% 65% 50% Net write-downs IMF 219 219 313 ECB 128 128 183 Decrease in balance sheet (leverage constant) IMF -12. 4% -12. 4% -17. 8% ECB -7. 3% -7. 3% -10. 4% Change in leverage ratio 0% -5% -5% Decrease in balance sheet (with delevraging) IMF -12. 4% -16. 8% -21. % ECB -7. 3% -11. 9% -14. 9% * Billion EUR, EUR/USD exchange rate 1. 33. Source : European Commission (4) 1760 31538 834 488 35% 407 238 -23. 1% -13. 5% -10% -30. 8% -22. 2% 11 European Commission Economic Crisis in Europe: Causes, Consequences and Responses As noted, most major financial crises in the past were preceded by a sustained period of buoyant credit growth and low risk premiums, and this time is no exception. Rampant optimism was fuelled by a belief that macroeconomic instability was eradicate d. The ‘Great Moderation', with low and stable inflation and sustained growth, was conducive to a perception of low risk and high return on capital.In part these developments were underpinned by genuine structural changes in the economic environment, including growing opportunities for international risk sharing, greater stability in policy making and a greater share of (less cyclical) services in economic activity. Persistent global imbalances also played an important role. The net saving surpluses of China, Japan and the oil producing economies kept bond yields low in the United States, whose deep and liquid capital market attracted the associated capital flows. And notwithstanding rising commodity prices, inflation was muted by favourable supply conditions associated with a strong expansion in labour transferred into the export sector out of rural employment in the emerging market economies (notably China).This enabled US monetary policy to be accommodative amid economic bo om conditions. In addition, it may have been kept too loose too long in the wake of the dotcom slump, with the federal funds rate persistently below the ‘Taylor rate', i. e. the level consistent with a neutral monetary policy stance (Taylor 2009). Monetary policy in Japan was also accommodative as it struggled with the aftermath of its late-1980s ‘bubble economy', which entailed so-called ‘carry trades' (loans in Japan invested in financial products abroad). This contributed to rapid increases in asset prices, notably of stocks and real estate – not only in the United States but also in Europe (Graphs I. 1. 6 and I. 1. 7).A priori it may not be obvious that excess global liquidity would lead to rapid increases in asset prices also in Europe, but in a world with open capital accounts this is unavoidable. To sum up, there are three main transmission channels. First, upward pressure on European exchange rates vis-a-vis the US dollar and currencies with de facto pegs to the US dollar (which includes inter alia the Chinese currency and up to 2004 also the Japanese currency), reduced imported inflation and allowed an easier stance of monetary policy. Second, so-called â€Å"carry trades† whereby investors borrow in currencies with low interest rates and invest in higher yielding currencies while mostly disregarding exchange rate risk, implied the spillover of global liquidity in European financial markets. 4 ) Third, and perhaps most importantly, large capital flows made possible by the integration of financial markets were diverted towards real estate markets in several countries, notably those that saw rapid increases in per capita income from comparatively low initial levels. So it is not surprising that money stocks and real estate prices soared in tandem also in Europe, without entailing any upward tendency in inflation of consumer prices to speak of. ( 5 ) Graph I. 1. 6: Real house prices, 2000-09 190 180 170 160 150 140 130 120 110 100 90 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Index, 2000 = 100 United States United Kingdom Source: OECD euro area euro area excl. Germany 500 400 300 200 100 0 03. 01. 00 12. 10. 00 Graph I. 1. 7: Stock markets, 2000-09 300 200 100 0 27. 07. 01 14. 05. 02 25. 02. 03 05. 12. 03 22. 09. 04 05. 07. 05 12. 04. 06 25. 1. 07 07. 11. 07 22. 08. 08 DJ EURO STOXX (lhs) Source: www. stoxx. com DJ Emerging Europe STOXX (rhs) Aside from the issue whether US monetary policy in the run up to the crisis was too loose relative to the buoyancy of economic activity, there is a broader issue as to whether monetary policy should lean against asset price growth so as to prevent bubble formation. Monetary policy could be blamed – at both sides of the Atlantic – for (4) See for empirical evidence confirming these two channels Berger and Hajes (2009). (5) See for empirical evidence Boone and Van den Noord (2008) and Dreger and Wolters (2009). 12 Part I Anatomy of the crisis cting too narrowly and not reacting sufficiently strongly to indications of growing financial vulnerability. The same holds true for fiscal policy, which may be too narrowly focused on the regular business cycle as opposed to the asset cycle (see Chapter III. 1). Stronger emphasis of macroeconomic policy making on macro-financial risk could thus provide stabilisation benefits. This might require explicit concerns for macro-financial stability to be included in central banks' mandates. Macro-prudential tools could potentially help tackle problems in financial markets and might help limit the need for very aggressive monetary policy reactions. 6 ) Buoyant financial conditions also had microeconomic roots and the list of contributing factors is long. The ‘originate and distribute' model, whereby loans were extended and subsequently packaged (‘securitised') and sold in the market, meant that the creditworthiness of the borrower was no longer assessed by the originator of the loan. Moreover, technological change allowed the development of new complex financial products backed by mortgage securities, and credit rating agencies often misjudged the risk associated with these new instruments and attributed unduly triple-A ratings. As a result, risk inherent to these products was underestimated which made them look more attractive for investors than warranted.Credit rating agencies were also susceptible to conflicts of interests as they help developi