Thursday, October 31, 2019
Importance of Information Management Essay Example | Topics and Well Written Essays - 1000 words
Importance of Information Management - Essay Example This is important in that it would assist the management plan on better ways of servicing its client. This supports the arguments form the paper that states that information management forms the basis for improving the students’ satisfaction and learning experience. Information is the only way through which management or the administration can interact with the students. I also realized that a channel linking the academic staff and the teaching staff or the teacher and the student is very important. Consequently, there must be a channel that should link them. It is clear that information presented in the paper support the claims made by Erlanger (2005)that states that knowledge management or information management impacts on innovation and organizational performance directly and indirectly (through an increase on innovation capability). This is because the acquisition of the right information from the clients, for this case, students would enable the management or the school a dministration to plan for the best strategies to adopt towards improving the performance of the students (Levy, 2003). Information management provides the basis for improving the performance of the employees. Based on the discussion from the paper, it is clear that in school setting, the performance of the teachers can be enhanced through course unit evaluation. Course unit evaluation is where the students fill a form that targets at exploring whether the teacher or the tutor is doing as expected. The paper reveals that although the course unit evaluation is important, most people especially the students take it lightly and hence fail delivering comprehensive information to the academic staff. This would prevent the staff from coming up with appropriate intervention measures. The paper affirms that it is possible to resolve this by imposing a forceful feedback into the system. This would make the student take the issue seriously. The time for evaluation is also very important. It is undisputable that if the evaluation is done at the end of the course, then the respondent, or rather the students may not benefit because the kind of changes that would be adopted would be possibly implemented in the next session. Because of this, it is true that appropriate and effective evaluation should be carried out in the middle of the course (Babcock, 2004). Appropriate and effective information management provides the basis for improving the performance of the client. Grading, for example, is an example in which this point becomes relevant. It is clear that grading is a means through which the management can meet the students’ needs. Just as the paper puts it, it is true that appropriate grading system should be able to motivate the student and not just to give them grade. The paper affirms that comments are imperative because it offers detailed, personalized feedback that would help in measuring progress towards strategic targets (Kanyengo, 2009). Additionally, the paper gives an insight of significance of using the online quizzes and homework tasks on blackboard. I wholly support this fact because adoption of online quizzes and homework task on blackboard would be time-consuming and also it allows provision of grade or a few generic statements of feedback. A study that was done by Liu & Cavanaugh (2011) reveals that teacher’s comments and feedback on the student’s assignments as well as teacher-student interaction are very
Tuesday, October 29, 2019
Comparative analysis of English letter writing Essay Example for Free
Comparative analysis of English letter writing Essay Research background  Business letter writing within an international context is of valuable significant in the business and career sector. An interest on business letter writing culture needs to be explored so as to understand various context of how different cultures within an international perspective write business letters. This means more empirical research on business letter writing methodologies and culture.  This will facilitate the easy comprehension of how to relate and even apply for work in different countries and getting an interview and subsequently a job based on the understanding of business letter culture and methodologies of that specific country.  This means, business letter writing culture has various different concepts, which need to be explored. Empirical research on business letter writing show there are various elements and principals of business letter writing. These elements are distinctive and are meant to supply sufficing background on how to correspond effectively in economic references. The context of business letters lies within the profound difference in culture and use of English in different countries. British, American and Canadian styles have almost similar formats but different style as well as different syntax construction elements.  In Canada, which is the key focus of this paper, there are many similarities in the standard format and style of English business letters but the style, syntax formation and word choice seriously dissent with the Standard English business letter. Our focus on the Canadian business letter writing culture and the concepts employed in writing these economic letters like work application letters, contract procurement letters, government trade concessions and incentives letters as well as translation of Canadian business letter reference translations to English. This profoundly draws out the adaptation of the English language by the Canadian culture and the subsequent nativization of the English language to the Canadian culture. The various elements of writing a business letter explains the context of globalization of English as a corporate lingua franca with emphasis on various business writing cultures and how they use these elements to communicate the various arising economic references. The Latvian context helps in cross-examining differences in the style and format of economic letters within different cultures as well as the inception of standard letter writing styles.   This explains the various contexts of business letter writing whereby, we examine the acquisition of English as a second language in Latvia, the inception of English letter writing in Canada and the different styles and approaches to business letter writing Canada as well as a cross examination on the differences in the formats and styles of economic reference letters in Britain and the America and the Canada.  This research background helps us review the literature on the context of Lavian, British, Canadian and American business letters. On the Canadian context, we explore further, the style, culture and the empirical research and profound review of the society’s perception of English as a second language and the subsequent use of the English language as a standard language to express and communicate business references in the Latvian corporate world. As such we add up existing empirical research with facts and reviews of arising differences, ease of translation and the use of various native Canadian (French, Indian) language style in business letter writing. Introduction  The increasing importance of business letters within an international context is important in improving the level of proficiency in both corporate executives and other persons who wish to write business letters. Business letters reflect to communication between a party and a company/corporation with a reference denoting an economic reference like a contract, application for a job or any other business related reference.  A more prolific description of business letter is ‘a letter written when particular issues on a particular corporate subject need to be resolved. These particular issues include establishing an important business contact in a local business environment and overseas, selling or buying, advertising and other business related activity.   When writing these letters certain principles referred to as ethical considerations are adhered to so as to add panache to the meaning of the letter. These ethical considerations are the drivers of the message of the letter and profoundly explain the role of the paper and the context of the perception, attitude and meaning of the letter writers’ intentions.   Emerging differences in style and format while both these aspects are derived from the traditional English business letter is of interest. It requires more research to explain how communities around the world adapt the English language to suit their native style and internationalize it. This paper explores the Canadian community and their business letter writing styles and formats.   Ethical considerations in business letter writing in Canada are similar to most Standard English formats and styles. According to Artemeva (1998) â€Å"in the global context, English is often used as a medium of communication for both the English-speaking and non-English speaking partners†(Artemeva 1998: 286). Toury explains this context of difference in the culture of writing more profoundly  He asserts that, two languages may possess a roughly corresponding set of styles; however, cultural factors, social context, organizational structure, and the like make the verbal representation of mental sets so highly situated within a particular culture that, even though these mental sets may overlap between one language and another, they rarely match exactly†Toury Gideon 1980). This explains the context of difference in style and format of Canada English letters from the Standard English business letter.  The Canadian context is better understood from the Bahktin and Rodman approach on difference in cultures and their adoption of English by these cultures. They assert that the differences between languages as systems imply certain incompatibilities between utterances produced by speakers and writers of different languages if they choose one shared language as a medium of communication. Artameva explains this context further through expounding on the difference on the sense of business letter translation by a non English speaker employ a rhetoric and a sequence of thought. According to Kaplan, this rhetoric and sequence of thought, â€Å"destroys the expectation of the native reader†(Kaplan 4).  Cultural influences, then, often lead to misconceptions that require to be empirically measured. Various tools of evaluating and overcoming such misconceptions are required. One of the most effective methodologies (tool) of evaluating these misconstruing is the contrastive rhetoric which highlights pragmatic errors that are as a result of interaction of language pragmatic errors that are â€Å"the result of an interactant’s imposing the social rules of one culture on the listeners’ communicative behavior. According to Riley the situation where the social rules of another culture would be more appropriate. He explains that grammatical systems of the Canadians and English are fundamentally different. English is a language in which grammatical meaning is largely expressed through the use of extra words and by changes in word order. Overview on writing letters in Canada and the British and American perspective  According to the Canadian English language proficiency, individual skills in using grammar to communicate is essential Paradigms of business letter writing and also general communication using the written form is of interest to Canadian researchers. There is minimal empirical research on the subject leading to scarce information on both style and various aspects of the concepts employed.  Due to its multi cultural nature, Canada represents an interesting tradition in writing and the gradual adaptation and adoption of English language to its multi culture. The education system as well as the corporate weather and institutions in Canada require individuals to obtain proficiency levels in Canadian English. These levels of proficiency will help these individuals have abilities in general reading and writing skills.   This has led to various institutions in Canada to lobby and support for the post-secondary and employment training programs in which functional reading and writing skills in the multi cultural society to increase the capacity of the labor sector. The labor sector as well as the education sector seeks to have individuals who have proficiency in reading and writing as well as abilities in sentence structure, reading comprehension, English usage, and essay writing.  According to Graves (1997), â€Å"the differences between Canadian British and American cultures as they manifest themselves in business discourse are in the complexity inherent in a multicultural society as in the context of Canada. In Canada there is a concern for and tolerance of others, awareness of class distinctions, concern for the collective over the individual. This distinct Canadian identity affects genres such as the direct marketing letter because the genre depends on shared understandings between writers and readers; these understandings in turn depend upon cultural values†(Graves 1997:2).  Examining the letters written by Canadians and Americans explain the difference in the cultural context of writing letters. Graves argues that Canadians, British and the Americans employ the concept of power distance, directness in the subject of the letter and individualism within the wordings style of the business letters. There are emerging differences in syntax formation and the style of writing the economic letters and most notable, there is the distinctive virtue by the Canadians About their nature. ‘Business communicators need to be aware that Canadians see themselves as culturally distinct, and they need to write differently for Canadian audiences’ (Graves 1997:2-6). Similarities and differences in the paradigms of letter writing in Canada, America and Britain Canada Britain America  ·Ã‚        Canadians stick to traditional British English ( This is in speech and syntax formation)  ·Ã‚        Language is curt and lays emphasis on the context of the purpose of communication due to the diversity of the community  ·Ã‚        The structural aspects of the Canadian letters are contentious. It is borrowed from both Englander and American style. The standard methodology is aligning the name, address and date of the writer and the addressee on the left  ·Ã‚        Britons stick to the traditional Queens English in both syntax and speech formation  ·Ã‚        The language, though aimed at denoting the purpose of the letter is traditional and the writers tries to maintain traditional England tradition  ·Ã‚        The English letter structural aspects are diverse. Name and address can be either left or right.  ·Ã‚        Americans have evolved English to suit their cultural and communication needs  ·Ã‚        There is minimal courtesy and the writer is elaborate, very brief and adhoc in his message through the use of slang words to shorten the letter and get to the point  ·Ã‚        American letter structural aspects reflect on aligning these addresses on the right and the addressee address on the right. Convections and the Canadian context of business letter writing  The genre of Canadian letters and the style is mostly associated with the Scottish emigrants. Numerous Scottish populations moved into Canada to form a Scottish community in the vast multicultural Canada. According to Moir (1984), Scottish repositories have played an important role in the preservation of Canadas written heritage, but few archivists and historians seem to be aware that Canadian institutions have reciprocated this favor to a significant degree. As a result of the increasingly heavy waves of emigration from Scotland that reached North America from the late eighteenth to the early twentieth centuries.  Canada has become a rich but relatively untapped source of manuscript material generated by Scots on both sides of the Atlantic. Analyzing these scripts is by no means near completion, and published inventories only hint at the wealth of material in Scotland that remains to be explored by students of Canadian social and business history in particular (Moir 1984: 146) Logan explains the Canadian letter writing as a profound and interesting. Logan emphasizes that Canadian business letter writers are keen on the subject of the letter and often make sure that the addressee is aware of what they want through the letter. Canadian economic letters are direct to the point and very clear on the subject.  A sample ancient Scottish-Canadian letter obtained from an archive shows the style and emphasis on the backbone of the message by the writer of the letter. As explained by Moir, the letter is part of the letter-books of Martin MacLeod that are in the possession of the Canadian History Department of the Metropolitan Toronto Library. After retiring from the British Army with the rank of captain, MacLeod took up the lease for his fathers sheep farm on Skye. The ensuing correspondence written at Drynock deals with the usual family concerns, especially MacLeods attempts to ensure that his children receive both a sound education on the isolated farm and ample provision for their future subsistence. For the most part, MacLeod was much more preoccupied with the management of his flocks, steadings, laborers, and sub-tenants as they all struggled through the difficult decade of the 1840s. Altho prices have recently been good, and very good yet, from the heavy losses of sheep from Braxy and severe weather as well as from the exorbitantly high prices of shearing materials, for some years of meal, matters were not, as people generally imagine, so easily brought to bear. (Moir, ppr 150) This letter is indicative of the exact subject the writer wants discussed and understood as easily and as fast as possible by the recipient.  The letter below also represents the directness and emphatic nature of the Canadians in their business and general communication through the written form. The letter is from a father in Dumfriesshire to his son in North America: Now Jock, if yere wee1 so much the better, and if yere doing wee1 yer mother and mes Vera glad tae heart’s, and if yere no wee1 were Vera sorry, but we canna help it, and as the postage between American and the Langholm runs pretty high, I must insist that the correspondence be stopped! (Moir, ppr 155)  Modern Canada defines and treats writing business letters as a practice within legislative, administrative, and diplomatic sphere. In Canada, this type of style is used in drawing up documents such as secretary correspondence, official documentation and administrative communication, juridical, diplomatic, legal laws, decrees, treaties, acts, official correspondence, certificates and application letters. Examples of Canadian business letters Sample 1 ACKNOWLEDGEMENT AND ACCEPTANCE OF ORDER  Date: 29th April 2008 To: IAN MUNRO  We are in receipt of your order as contained in the attached purchase order form. We confirm acceptance on said order subject only to the following exceptions:       Clean white, lean, fresh and from Derby On exceptions noted, we shall assume you agree to the same unless objection is received within ten days of receipt of this notice.  Thank you for your patronage.                                                                      Very truly, Sarah Corner Note that, Canadians end their letters with yours truly or truthfully. This is similar to the American style of closing their formal letters.  Sample 2 7890 Montreal Avenue Montreal Metro, ON 7MJ76 4J11 May 2, 2008 Mansfield Manufacturing Company 7080 Rue Prairie Montreal, QX 7CG 8LM23 Please replace the ten pairs of defective Jackboots recently purchased. I followed the guidelines for picking the proper jackboots but the package I was sold contains defective jackboots Perhaps your quality control people can determine why they have deteriorated so much. Youll find the pairs enclosed and you could make me feel better by replacing my ten pairs with quality jackboots. Sincerely, Al Kassim Kassam How Canadian address their envelopes when sending their business letters. Addressed Envelope DAVID KERRY 2889 DANIELS AVENUE NIAGARA FALLS ON L2G 4J5 MONTREAL SAXON COMPANY 1789 RUE MARCONI MONTREAL QC H2S 8K1 Note the block style format of address In Canada, almost everyone nowadays has the skills to write a letter. The style and genre are adapted to increase the ability of the letter to make sense and to impart the required message as intended by the letter writer. The Canadians make a brief introduction, a body of support paragraphs, and a conclusion.  The Canadian are no exception to formal style of structuring a business letter. In fact they conform to the principles of clear and effective writing that projects the exact nature of the message intended. As such, as in the case of British and American letters, Canadian letter business letters have their own specific features, which distinguish them from other letters so as to give them a functional style. These functional styles are: Objectivity Formality Specificity and accuracy Rationale Imperativeness Politeness Besides this structural style and distinctiveness, the Canadian business letter falls in the two commonplace types of letters Full block style: In this method of writing a business letter, the text and all its elements is aligned to the left margin of the paper. Modified block style: This requires writing the text down the middle of the page and aligning the return address, date, closing, signature, and typed name on the same direction (down the text); the other elements of the text are aligned to the left page margin of the paper. (George Mason University Writing Center 2006:1) This is exemplified by the letters below, which shows the structural outlook of the Canadian business letters. Sample of an annotated Business Letter (Note that, this letter is an excerpt from Pearson’s Education of Canada 2002)  134A Quebec Street Devonshire, ON LL3C 1LB6 November 4, 2002 Mr. Allan Cushy Toronto County Council 411 Northern Main Street Toronto, ON L3B 3X4 Dear Mr. Cushy Putting a stop sign on Aqueduct Street will reduce the chances that a speeding car will kill one of our children. Aqueduct Street looked like the quiet, safe environment I wanted for my children. Many of the neighborhood childrenâ€â€including my ownâ€â€enjoy playing along the street, and they sometimes cross it. Because Aqueduct Street runs parallel to a much busier major thoroughfare, car drivers use our street to avoid the heavier traffic and stop lights on Niagara Street. Most of these people are too fast for a residential neighborhood with many families and many children. My concerned neighbors and I feel that a four-way stop created at the corner of Aqueduct and Church would reduce non-residential traffic and slow down all the drivers using Aqueduct Street. The expense would be modest compared to the incalculable cost of a childs injury or death by a speeding motorist out to save a few minutes commuting time. By installing the stop signs, you can help make our street safer for children, as we request in the enclosed petition, signed by all the adults on Aqueduct Street.  Please contact me before the next council meeting on November 15. The residents of Aqueduct Street are worried that heavy non-residential traffic is endangering our children. We urge the City Engineer to place a four-way stop sign at the corner of Aqueduct and Church to help reduce the danger. Sincerely, AQUEDUCT STREET RESIDENTS COUNCIL Solomon Maguire President dbr Enclosure Copy to Councilor Peter Mechling Howard As such, we observe the structural composition of a Canadian business letter follows the following structural format, Heading Date Inside Address Salutation Complimentary Close Organization Name Writers Name Reference to Keyboardist Enclosure Notation Copy Notation Body of Letter Indicate one blank line Sample showing another approach in the format of a Canadian business letter 857 Albuquerque Niagara Falls, ON L2G 4J5 April 13, 2008 Allan Miller 8973 Strobin Avenue Montreal, QC H56L 90SL31 Ref Body of the letter Sincerely Joy Hoffman   Note that, the style and format show the blocks should be aligned to the left hand side as one writes the letter.  Samples of brief business letters/notes to customers Sample 1 Dear Customer Thank you for your order. At this time we cannot fill your order due to an unexpected shipment delay from our overseas suppliers. We will hold your order for arrival of the merchandise, and ship shortly thereafter. Unfortunately, we cannot provide you with a specific shipping date at this time. Thank you for your anticipated patience in this matter. Sample 2 Dear customer Please accept our apology for having shipped merchandise in excess of your purchase order. We have made an adjustment in your account to reflect this error and have arranged for our delivery service to pick up the excess merchandise on 16th May 2008. We are sorry for the inconvenience this has caused you and are most appreciative of your cooperation and understanding in this matter. Thank you for your recent order. Samples of employee business letters Sample 1 *********INTER-OFFICE MEMO********** FROM: CORPRAL MARCUS JENKINS III               DUTY AND REFERRALS OFFICE TO: ALL OFFICERS SUBJECT:  SMITH PERKINS PROMOTION PARTY AND GIFT On Thursday, May 2, 2008 at 4:30 P.M., in the officers mess As you know, Smith has been with us for 12years now, and has been held in high regard by his fellow officers. I am requesting that each officer donate $10.00 so that we might present to Smith a gift memorializing his promotion. We are not yet decided on the type of gift, and your suggestions would be highly appreciated. Look forward to seeing you on Thursday. Marcus Jenkins Sample 3                 NOTICE OF UNSATISFACTORY PERFORMANCE                                   Date: 3rd May 2008 To: Marry Ann Bush     Confirming our meeting relative to certain unsatisfactory aspects of your performance, we expect that in the future you shall improve your performance by the earliest convenience     We have every confidence the problem will not be repeated. John Shawn HUMAN RESOURCE MANAGER Comparative analysis on British and American letters British letters English style of letter writing   Empirical research on both English pedagogy as well as the key elements of writing business letter within the British perspective elicits much interest in English pedagogy.    Due to the originality of the English language from Britain, it is deemed that, the formats and other key elements of writing letters are borrowed from the British culture of writing letters  According to Jenkins and Hinds, the letter writing process takes place in three reoccurring stages. These reoccurring stages are Pre-writing, writing and re-writing. This combination makes letter-writing recursive (Jenkins and Hinds 1987: 327). In many British writing centers writing is taught with a focus on meaning, not form; on process, not product; on authorial intention and audience expectation, not teacher authority or punitive measures; on holistic and human concerns, not errors and isolated skills.  The British have been following two styles and formats in their letter writing methods. Full block style: In this method of writing a business letter, the text and all its elements is aligned to the left margin of the paper. Modified block style: This requires writing the text down the middle of the page and aligning the return address, date, closing, signature, and typed name on the same direction (down the text); the other elements of the text are aligned to the left page margin of the paper. (George Mason University Writing Center 2006:1)  A close examination of the elements of the letter shows that elements of the letter are the keys to a successful letter. The return address of the company the letter writer represents is important so as to facilitate the intended response reaching him after his submission. The second most elements are the date of letter. This is followed by inside address, salutation, body, closing, signature and position of the letter writer.  The British have long used this concept as a tangible aspect of writing their letters. British style is brief, straightforward, and polite. According to George Mason University 2006, British letters follow a certain intrinsic format. This is as discussed below. Below are the structural of a standard business letter and their functions: Return Address: This refers to the letter writers’ address or the address of the company he represents Date: The writer leaves two blank lines after the return address. The writer spells out the month and writes the day, puts a comma, and then inserts the year. Inside Address: The writer leaves two blank lines after the date. He type the address of the person he is writing to. Salutation: The writer starts his letter with Dear, followed by the person’s name or ends this line with a colon if he doesn’t know the name of the recipient. Body: British culture calls for the writer to align the message on the left margin. He skips a line before starting a new paragraph without indenting. Also he makes each paragraph clear and concise. Closing: British style recommends you double space after your last body paragraph, then use a conventional closing, followed by a comma (sincerely yours) Signature: The writers’ signature appears below the closing and if he has no personal relationship with the addressee use both his first and last name. Elements and styles of writing British letters  English letters follow the above-discussed format and structure; however, there is a distinct style in the syntax formation and the type of words and references to use when writing a letter. Practical opening lines of a letter Opening lines in a letter are meant to introduce the writer’s intentions and to make reference to previous correspondence. Opening lines commonly used in the British culture are commonly adapted into other cultures. (see www.speakspeak.com) With reference to your letter dated 15th May 2007, I am glad to inform you that I will consider working with you. I am writing to enquire about the amount of money deposited in my account on 4th April 2008. Your response will be highly appreciated After having seen your advertisement in the daily telegraph, I am hereby applying for the post of executive secretary. After having received your address from you dear friend Johnson Atkinson, I am hereby writing to you about your relatives in Moscow. We/I recently wrote to you about the college in Glasgow. It is my pleasure to inform you that the college is enrolling students and they are waiting for your application Thank you for your letter of 8 May. We are happy to let you know that our company has appointed you to the post of executive sales manager. Thank you for your letter regarding the issue of orders to the Coventry. Its my sincere wish to have the orders delivered as soon as possible Thank you for your letter/e-mail about the price of the motorcycle. I really appreciate your information. In reply to your letter of 8 May, the amount of money I am willing to pay for the car is half that you quoted. (www.speakspeak.com.) Samples of British letters Sample i Nexus Holdings 7115 MJB Thames Avenue London Ref; 0078/2 /5/2008                                                             Managing director                                                                                               Mounilex Trading Co.                                                                                               SLR 543L London Re: Complaint                                                           Dear Sir,  We regret to inform you that your delivery team delayed the supply of gunny bags.  I would appreciate if you sent over one of your representatives to address the issue promptly. Yours faithfully †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..                                                               †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Susan Price                                                                             Anthony Hopkins Accountant General.                                                            Managing director Sample ii                                                                                                                 Jack Miles                                                                                                          Trafalgar square Ave                                                                                                          London                                                                                                          Tel 0444 453 675                                                                                                          April 29, 2008                                                                                                          Michael Lawrence                                                                                                          Human Resources dept                                                                                             10TH Broadway Av                                                                                        London Dear Mr. Miles, I am writing in response to your advertisement on Tuesday on the telegraph. I am interested in the position of chief accountant.  I have a bachelor’s degree in Economics from the University of Liverpool and a diploma in advanced accounts studies from Oxford University.  I have enclosed is my resume and a copy of my certificates for your perusal. I am available for an in interview any time you find convenient.  I look forward to hearing from you soon. Yours sincerely †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Jack Miles Sample iii  HEAD HUMAN RESOURCES OFFICE NEW YORK Tel. 07036781488 OFFICIAL NOTE Ref No. 78/27th April 2008 This official note is issued to Karen Whittaker, occupying a receptionist position in the company, is to certify that Karen has been granted a one month leave.    This is to serve before HR department.                                                                                                          †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦                                                                                                           Greg Morison                                                                                                           HR Manager       There are several other formats of business letters which are used Samples                                                                                               DAVID MARLONE                                                                                                                    RYAN ISLAND                                                                                              PARIS, FRANCE  THE MANAGER BLACKWATER HOLDING 345 HR43 BORDEAUX BORDEAUX FRANCE                                   Dear sir/madam  RE: ANNUAL GENERAL MEETING  This reference concerns the forthcoming general meeting of the directors of Black-water Holdings, which will be held at the Pan-Africa hotel. You are reminded that your attendance is highly expected. Yours faithfully CLARK SANDLINE MANAGER American letter writing context  The American culture has been wiped out by the email trends, which have turned out as the most popular methodologies of writing letters. Baron 2001 argues that ‘given e-mail’s stage wise evolution, it’s hardly surprising that commonplace depictions of the linguistic character of email (such as â€Å"everyone uses emoticons †or â€Å"the email medium leads to flaming†) are not universally applicable to the messages written today by grandmothers, job applicants, customers ordering on-line, or teenage girls chatting through instant messaging’ (Baron 2001:1). This change of style and the traditional methodologies of contemporary writing style I s blamed on three education reform systems; the Harvard, John Dewey and a student-centered curriculum from the 1970s onwards (6). Consequence of these reforms has been a away shift from teaching formal rhetoric to encouraging informal writing, typically placing more value on what the student wants to express than on the actual language (including sentence mechanics) used to express it. This has further led to an increased candor, coupled with growing disregard for the social and intellectual behaviors traditionally associated with upward mobility and education; have to do with contemporary writing style? We said earlier (Figure 6) that email and contemporary writing more generally tend to be characterized by informality of style, a psychological assumption that the medium is ephemeral and a high level of candor’ (7-10).  These changes in syntax and speech structure in writing communication letters are characterized by such inceptions and transformations like the ones below. Homer = home run Albany = AlbaN.Y. nothing = othing  Though these reflect on the traditional style and genre, these letters are still apt in the current American culture however, defunct in the emerging ages of the youth and affluent societies.    The emergence of e-mail culture and hackneyed slang lingo has left the American letter writing culture blunt and rhetorical. In Treimans approach to structural difference in the American English letter writing and speech form to the British one, she explains that American students spoke a rhotic dialect, pronouncing an /r/ in such words as leper, hermit, horde, and gnarl while British students with their nonrhotic dialect, did not include an /r/ in such words. This brings the difference in the pronunciation and spelling in the American style and the British (Treiman 2002: 3).  Various structural, spelling and syntax formation differences in the American letter writing culture embroider a challenging empirical research on the genre of writing letters the American way. Samples of American letters There is minimal structural difference in the academically recommended letter writing styles. The emerging context of difference is blamed on the emerging trends and cultures. These samples are traditional American letter DANIEL ARMANI PO BOX 345 LSP NEW YORK USA 3rd April 2008 JOHN NEBRASKA MANAGER CENTRAL INTELLIGENCE ANALYSTS PO BOX 23454 WASHINGTON DC USA Re: INTELLIGENCE BRIEF RECIEPT Dear Sir,  This reference concerns the latest intelligence brief submitted for your analysis last week. Please acknowledge receiving the brief.                                                                                                          Yours truly                                                                                                          Daniel Armani The structure of this letter is unique. The writers name and address is on the right while the addressee’s names and address is the left side of the letter. The writers conclusion is on the right side and he signs out with a ‘yours truly sincerely’ on the right side of the letter. Sample 2 DANIEL ARMANI PO BOX 345 LSP NEW YORK USA 3rd April 2008 JOHN NEBRASKA MANAGER CENTRAL INTELLIGENCE ANALYSTS PO BOX 23454 WASHINGTON DC USA Re: INTELLIGENCE BRIEF RECIEPT Dear Sir,  This reference concerns the latest intelligence brief submitted for your analysis last week. Please acknowledge receiving the brief.                                                                                                          Yours truly                                                                                                          Daniel Armani                                                      Differences between Canadian, British, Latvian and American letters                                               Notable differences in the genre, style and speech between these nations is mostly observed in the structural form. Also, observations on the letters from either of the nation show differences in syntax and word form which another notable difference is within the format. Below are samples of these letters. Each has a distinct feature from te other and these distinct features will be noted below. Sample of American standards business letter JOHN SMITH RUE MONTAMTRE             125 PARIS, FRANCE 3RD April 2008  THE MANAGER PANAFRIC HOLDING 134 RUE BORDEAUX BORDEAUX                                      Dear sir/madam  RE: REMINDER OF THE 5TH INVESTORS SUMMIT  This reference concerns the forthcoming 5th investor’s summit to be held at the Ritz hotel. You are reminded that we are looking forward to your attendance as a member of the investors club.  For further details kindly please write to us as soon as possible Yours faithfully JOHN SMITH MANAGER Sample British business letter Nexus Holdings 7115 MJB Thames Avenue London Ref; 0078/2 /5/2008 Director  Mounilex Trading Co  SLR 543L London                                       Re: Complaint                                                           Dear Sir,  We regret to inform you that your delivery team delayed the supply of gunny bags.  I would appreciate if you sent over one of your representatives to address the issue promptly. Yours faithfully †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..                                                              †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Susan Price                                                                             Anthony Hopkins Accountant General.                                                            Managing director  Sample Canadian business letter                                                                                                          Jack Miles                                                                                                          Trafalgar square Ave                                                                                                          London                                                                                                          Tel 0444 453 675                                                                                                          April 29, 2008                                                                                                          Michael Lawrence                                                                                                          Human Resources dept                                                                                             10TH Broadway Av                                                                                                 London Dear Mr. Miles, I am writing in response to your advertisement on Tuesday on the telegraph. I am interested in the position of chief accountant.  I have a bachelor’s degree in Economics from the University of Liverpool and a diploma in advanced accounts studies from Oxford University.  I have enclosed is my resume and a copy of my certificates for your perusal. I am available for an in interview any time you find convenient.  I look forward to hearing from you soon. Yours truly †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Jack Miles  Sample Latvian letter Mr. Roy Lawrence 12187 Manchester 54 MJB Manchester UK May 26, 2002 The General Electric Company 15456 Dawson Park Way College Park, FL 33133 Manchester UK Dear Customer Service Representative: I recently purchased one of your sockets for my television cable extension. Unfortunately, after viewing the components that came with the product, I discovered that four of the parts were missing. Also, the instructions that came with the tent are in Portuguese and Russian, but not in English, the language I speak. These two unforeseen problems have resulted in the socket remaining unused.  I am writing to request replacements for the missing parts, and a copy of the full set of assembly instructions (in English) for the model I purchased. If reasonable arrangements are not made within ten business days, I will return the socket to the store I purchased it from and expect a full refund. To assist you in processing my request, I am including a copy of my sales receipt and a list of the missing parts. I have purchased other electrical appliances manufactured by your company in the past, and have always been impressed with the quality. I sincerely hope this that any future purchases I make will live up to the standard. Sincerely,  Roy Lawrence                         Enc: 2, Differences between American and British Style of letter writing and the Canadian and Latvian context Major differences are observed in the spelling. British spelling is different from the American spelling although most words are spelled the same way globally. The difference between the British spelling and the American spelling is small. Words ending with -ize in American English are spelled with -ise in British English (sympathize, sympathise); the words that end in -or in America end in -our in Britain (honor, honour; It is notable that many consonants that are single before suffixes in America are doubled in Britain (traveled, travelled) this is observed in the basic writing of various texts. Summary British spelling when writing letters American spelling when writing letters Emphasise Sympathise Honour Colour Emphasize Sympathize Honor Color  Traveled Leveled Catalogue Travelled Levelled Catalog  Much pedagogy on the grammar context focus on the UK style however it is also important to have insights of the other countries. In the UK, it is in order to write the senders name before the address in business letters. Another observations regarding differences between American and British business writing style is that while it is unusual in the UK to close a formal business letter with Yours truly, this practice is accepted in the USA.  Other differences between British and American are seen within the context of designations for the different members of the Board of Directors when writing to them as a group. Summary British style American style  ·Ã‚        Sender name appears before the address though it is optional based on designation  ·Ã‚        Closing the letter is usually through a ‘yours sincerely’ or ‘yours faithfully’  ·Ã‚        When addressing many people or directors the writers uses ‘Dear sir’s’ â€Å"directors’ or ‘Messrs’  ·Ã‚        Senders name does not appear though often some letters have this feature  ·Ã‚        Closing the letters is usually through a ‘yours truly’  ·Ã‚        The American style entails the use of â€Å"The directors† This difference in style, grammar and format is summarized below British style, format and grammar of writing letters American style, format and grammar of writing letters  ·Ã‚        Headings are on the centre or right hand side of the letter  ·Ã‚        References are on the upper left of the letter  ·Ã‚        When writing the dates the writer uses the format Day, Month, Year  ·Ã‚        Uses Messrs when addressing the addressee.  ·Ã‚        Uses ‘messrs, company name then the address and other important addresses  ·Ã‚        Attention line includes name of the addressee  ·Ã‚        Uses ‘Dear sirs  ·Ã‚        Has no subject line in the letter  ·Ã‚        Headings of the writer are at the right side of the letter  ·Ã‚        Reference are on the lower left or right side of the letter  ·Ã‚        The American writer uses the format Month, Day, Year  ·Ã‚        Uses ‘Dear sir’ when addressing directors or other officials  ·Ã‚        Dear Mr./Ms./Mrs./Miss full name, title, company name, address  ·Ã‚        American writers start with Dear Mr./Ms. Johansen followed by salutation  ·Ã‚        American don’t use this  ·Ã‚        American format does have a subject line   Observation  The letters have different structures, formats and style. By examining the initial sample, we find out that, the Americans align their names and address to the right then write the name and address of the addressee on the left. They are direct to the point though not very courteous and straight to the point. Americans use fewer English words in comparison to the British and seem to be in a habit of being rhetoric.  The reference is underlined while the date is below the writers address. The letter ends with a ‘yours faithfully’ which denotes self confidence and frankness. Its written on the right hand side of the letter. This shows a structure which has the personal references on one side and the references of the addresses on the left side. The British letter has the writers address and personal reference centered on the top of the letter. It is like a letter head. There are two references and all are on the left side of the letter. The first one has the references number of the previous communication and comes before the address and profile of the addressee. The second reference comes after the addressee’s address and is pushed towards the center and underlined.  The opening lines are aligned to the centre. This is meant to indicate emphasis on rank and respect by the writer. The body is brief and concise. The writer is up to the point as fast and with as few words as possible. The signatories are aligned to the centre and the letter is closed with a ‘yours sincerely’ which is aligned to the centre of the letter.  The Canadian letter has the address of both the writer and addressee on the right side of the paper. After his address, he double spaces and enters the date then writes the addressee’s address. The opening lines begin with a ‘dear..’ and are on the left of the letter.   The body of the letter is long and uses words to emphatically concentrate on the subject of the letter and to inform the addressee of the point which the writer wants him to understand. The letter closes with a ‘yours truly’ which is indicative of honesty and politeness. It is aligned on the left of the letter and the writer signs and enters his name after the signature.  The Latvian letter is aligned to the left side. The writers name and address are on the left side of the paper. He enters the date after his addresses then enters the addressee’s address. The opening is curt and aligned to the immediate left of the letter so as to align with the addresses. There is no reference though it is a necessity in the writing convections.  The body draws out a less courteous writer and he is very straight to the point. He avoids using many words and is rapid in what he is communicating about.   He closes the letter with a ‘sincerely’ which further denotes lack of courtesy and explains the versatile briefness in the Latvian communication. Comparative analysis of Latvian, British, Canadian and American letters  British American Canadian Latvian British align their names and address at the centre Write the name of the addressee on the left Use various words to explain References are not underlined Closes with a ‘yours sincerely or sincerely yours’ Headings are on the centre or right hand side of the letter Americans align their names and address to the right Write the name and address of the addressee on the left They are direct to the point The reference is underlined Closes with a ‘yours truly Headings are on the right hand side The writers name and addresses are on the left Writes name and addressee on the left and also the date Use more words to explain their point Uses no reference or at times uses Closes with a ‘yours truly Headings are on the right side of the letter The writers name is aligned to the left side Writes the name of the addressee on the left side Uses curt and direct words Has or often does not have references Closes with a ‘yours sincerely or ‘sincerely yours The headings are on the centre.  Conclusion There are differences in each letter writing culture while there are distinct similarities in some cultures. Each culture uses the British style and genre of body structure while they have transformed their formats from the standards British format to suit their culture needs.  However, there rises a context of distance of cultures whereby we observe similarities  in cultures near each other. The British culture is being common in the formal Latvian letter writing style and culture. The same applies to the Multicultural United States and the Multicultural Canada. They share common styles and formats.
Sunday, October 27, 2019
Contributions of the Arrow Debreu model to financial theory
Contributions of the Arrow Debreu model to financial theory According to Elroy Dimson and Massoud Mussavian (1999), Arrow-Debreu model was developed as a model of general equilibrium that has been fundamental to economics and finance. Compared to earlier models, the Arrow-Debreu model basically generalized the notion of a commodity, differentiating commodities by time and place of delivery. For example, apples in Malaysia in July and apples in Singapore in June are considered as different commodities. Kenneth J. Arrow (1951) and Gerard Debreu (1951) work together to produce the first rigorous proof of the existence of a market clearing equilibrium, given certain restrictive assumptions. This field of research has had a profound impact not only on economic science, but also on financial markets, institutions and businesses all over the world. It often used as a general reference for other microeconomic models. As Ramu Gopalan (2008) stated, the pioneering work of Arrow and Debreu has had an enduring effect on the study of financial aspects of the economy in a general equilibrium framework. One of their key contributions is to introduce time and uncertainty into general equilibrium models. The Arrow-Debreu model was established since 1950s, many researchers had extended this model to both economics and financial economics. Although this model is criticized by various eminent economists, the dedication of this model in the history is indestructible. In this assignment, we are going to discuss the applications of Arrow-Debreu model majoring in the financial economics. The purpose of this assignment is to find out and understand more about the contributions of this model to financial theory. The applications of Arrow-Debreu model will be listed out and discussed further. Journals will be shown and summarized out in order to support our discussion. Finally, the last section in this assignment is the conclusion. 2.0 Background studies In this assignment, the applications of Arrow-Debreu model in financial economics will be discussed. But before that we have to know what the Arrow-Debreu model is. 2.1 Arrow-Debreu Model Arrow-Debreu model, also referred as Arrow-Debreu-McKenzie model (ADM model), is the fundamental model used in the General (Economic) Equilibrium Theory. It is named after its originator who are Kenneth J. Arrow (b. 1921) and Gerard Debreu (1921-2004) on Existence of an Equilibrium for a Competitive Economy as well as Lionel W. McKenzie (b. 1919). As what stated in the Farlex Financial Dictionary (2009), it says that this model is one of the most general models of competitive economy and is a crucial part of general equilibrium theory, as it can be used to prove the existence of general equilibrium (or Walrasian equilibrium) of an economy. Once we can prove the existence of such an equilibrium, it is possible to show that it is unique under certain conditions, but not in general. Furthermore, Arrow went on to extend the model to deal with the issues relating to uncertainty, stability of the equilibrium, and whether a competitive equilibrium is efficient. 2.2 Applications of Arrow-Debreu Model Arrow-Debreu model leads to a huge impact on economics and financial economics. First of all, it solves the long-standing problem of proving the existence of equilibrium in a Walrasian (competitive) system. This model analyzes the exact situations of those markets that are very competitive. In economics, Arrow-Debreu model suggests that a set of prices such as aggregate supplies will equal to aggregate demands for every commodity under certain assumptions made about the economic conditions (i.e. perfect competition and demand independence). Formulated in a purely mathematical form, the Arrow-Debreu model can be easily modified into spatial or intertemporal models with proper definition of the commodities based on the commoditys location or time of delivery. When commodities are specified to be conditional on various states of the world, the Arrow-Debreu model can easily combine expectation and uncertainty into the analysis. Besides, theoretical extensions and applications have been made to analyze financial and monetary markets and international trade, as well as other subjects. With a general equilibrium structure, the model is applicable in evaluating the overall impact on resource allocation of policy changes in areas such as taxation, tariff, and price control. Moreover, it applies to all general equilibrium models that are heavily dependent upon accurate mathematical proofs. In the field of financial economics, Arrow Debreu represents a certain kind of securities product which named as Arrow-Debreu security. This distinguished concept is a good teaching tool to understand the pricing and hedging issues in derivatives analysis. On the other hand, the Arrow-Debreu Model is also used in areas like financial engineering. But it has turned out to be very limited, especially in the multi-period or continuous markets. The model has been subject to the criticism that many of the assumptions it makes do not fit the workings of the real economy. However, the truth is that the Arrow-Debreu Model is very important for the derivative industry and helps the industry to grow at a rapid pace. 3.0 Literature Review In previous section, we have mentioned some applications of the Arrow-Debreu model both in the field of economics and financial economics. Now, the applications of this model majoring in financial economics will be discussed further. The functions of Arrow-Debreu model can be divided into six categories, asset pricing model, equity risk premium, corporate finance, Modigliani and Miller Theorem, Arrow-Debreu security and others. 3.1 Asset-pricing model From the studies, most of the Arrow-Debreu models applications are commonly used in shaping the asset-pricing model. Arrow-Debreu model was acted as an origin which gives the insight that consumption in different future states could simply view as different consumption goods according to Elroy and Massoud (1999). This result is proved and can be seen through various researchers journals. It is undeniable that the Arrow-Debreu model plays an important role in constructing the asset-pricing model. The evidences are given in following paragraphs. Based on the journal of Asset Pricing at Millennium written by John Y. Campbell (2000), he stated that theoretical and empirical developments in asset-pricing has taken place within a well establish paradigm for the last twenty years. While the well establish paradigm that he mentioned here is referred to the Arrow-Debreu model. Same as Franklin Allen (2001), he indicated that asset-pricing models are typically special cases of neoclassical Arrow-Debreu model. In the traditional Arrow-Debreu model of resource allocation, firms and households interact through markets and financial intermediaries play no role. On the other hand, the key element of the analysis in the modern version is the stochastic discount factor, which incorporates the Arrow-Debreu state prices and allows the assets to be priced. He also commented that this approach and the focus on the risk-return trade-off have allowed a rich interplay between the empirical and theoretical work. The equity premium puzzle is given as an example of special cases within the Arrow-Debreu framework in order to support his statement. Moreover, Elroy and Massoud (1999) narrated the historical development of asset pricing and derivative valuation on Three Centuries of Asst Pricing. He pointed out the success of conceptual framework that setting up the theory of asset pricing is down to Arrow (1953)s hard work. Dissatisfied with the current Arrow-Debreu framework, Arrow built up a series of contingent claims that follow the resolution of uncertainty to explain how one can achieve markets that are almost complete. Varian (1985) analyzed the impact of divergence of opinion on asset prices in an Arrow-Debreu economy. By considering the Arrow-Debreu model with agents who have different subjective probabilities, he compares and concludes the differences of opinion in an Arrow-Debreu contingent claim context. Based on his journal Divergence of Opinion in Complete Markets: A Note, three results were established. He concluded that in practice, increased dispersion of beliefs will generally be associated with the reduced asset prices in a given Arrow-Debreu equilibrium. Also, he uses this model to show that other things equal, if risk aversion does not decrease too rapidly, then assets with more dispersed opinion will have lower prices or vice versa. P. Bossaerts and C. Plott (2004) had done six financial markets experiments of testing two of the most basic propositions of modern asset pricing theory. The Arrow-Debreu model and the Sharpe-Lintner-Mossin Capital Asset Pricing Model (CAPM), these two theoretical models are used to be the framework of their experiments. In the end of their experiments, they discovered a swift convergence towards equilibrium prices of Arrow-Debreu model or the CAPM. This discovery is significant because they use the subjects that lacked of information to intentionally set the asset prices. Sometimes, the equilibrium is not found to be robust which clearly shows a result of deviations of subjective beliefs from objective probabilities. However, they still find the evidences that prove this does not destroy the tendency for markets to equilibrate as predicted by the theory. 3.2 Equity Risk Premium Next, the Arrow-Debreu model is applied to explain the equity risk premium. In an attempt to explain the equity risk premium, Rajnish Mehra and Edward C. Prescott (1985) developed an Arrow-Debreu asset pricing model. They found that historically the average return on equity has far exceeded the average return on short-term debt and Treasury bills. Thus, they try to use the Arrow-Debreu model to interpret this situation. In the end of the journal The Equity Premium: A Puzzle, they concluded that only those equilibrium model with friction (i.e. non-Arrow-Debreu models) will be the one that successfully explain both high equity risk premium and low risk-free returns. However, Rietz (1988) overthrew the conclusion of Mehra and Prescott (1985) in The Equity Risk Premium: A Puzzle. He mentioned that the reason for them to reject the Arrow-Debreu model is their specifications which cannot explain the high equity risk premium and low risk free returns that characterize the U.S. economy. Hence, he re-specified their model to include a low-probability, depression from a high return of compensation for the extreme losses during the market crashes, captured those possible effects from the market crashes and finally successfully proved that these crashes allow it to explain both high equity risk premium and low risk free returns without abounding the Arrow-Debreu paradigm as well as not altering their models attractive features. In the journal The Equity Risk Premium: A Solution, he explained further that it does so with reasonable degrees of time preference and risk aversion provided the crashes are apparently severe and not too unimaginable. 3.3 Corporate Finance According to Jean Tirole (2006), he specified that a substantial and important body of empirical work has provided a clearer picture of patterns of corporate financing and governance, and of their impact for firm behaviour and macroeconomic activity. One of them is the Arrow-Debreu model. During 1970s, the dominant Arrow-Debreu model of frictionless markets (presumed perfectly competitive and complete, unhampered by taxes, transaction costs, as well as informational irregularity) can prove to be a powerful tool for analyzing the pricing of claims in financial markets, but little about the firms financial choices and about their governance. Besides, in the complete market paradigm of Arrow (1951) and Debreu (1951), the financial claims returns depend on some choices such as investments, are assumed to be contractible and therefore are not affected by moral hazard. In Jean (2006)s opinion, financial markets were not plagued by problems of asymmetric information because investors agree on the distribution of a claims returns. Viewed through the Arrow-Debreu lens, he identified that the key issues for financial economists are the allocation of risk among investors and the pricing of redundant claims by arbitrage. Michael J. Brennan (1995) also clarified that the abstract simplicity of the Arrow-Debreu model yields few insights for corporate finance beyond the value additivity principle that was used to refute the conventional wisdom that conglomerate mergers will add value to the company through the corporate diversification. 3.4 Modigliani and Miller Theorem (M-M Theorem) Another application of Arrow-Debreu model is related to M-M theorem which devised by Franco Modigliani and Merton Miller (1958). This theorem explains that a firms financial structure is irrelevant under certain conditions, Arrow-Debreu environment. The value of a financial claim or a firm which equal to the sum of the values of the claims it issues is thus equal to the value of the random return of this claim or the firm computed at the Arrow-Debreu prices (the prices of state-contingent securities). Therefore, Arrow-Debreu model is used as a fundamental of economy in formulating M-M theorem. 3.5 Arrow-Debreu Security (State Contingent Claim) Mostly, Arrow-Debreu security will be the answer of the applications of this model majoring in financial economics if we searching it through the internet. Based on the journal A re-examination of the Modigliani-Miller theorem written by Joseph E. Stiglitz (1969), in a section entitled Arrow-Debreu securities, he not only showed the M-M theorem in a complete markets setting but also mentioned about the Arrow-Debreu model under uncertainty in which individual can buy or sell the promises to pay if a given state of the world occurs. This shows a direct relationship between the Arrow-Debreu model and the Arrow-Debreu security. Through the calculation, he observed that if he takes literally the Arrow-Debreu definition of a state of nature, there is undoubtedly will be more states of nature than firms and most of these states are similar with each other. An example, variation in the return on stocks can be explained by the business cycle, is given to support his statement. Robert E. Lucas (1984) analyzed the unified theories of money and finance on Money in the Theory of Finance. He examined and commented that financial and monetary theory have different objective, however, the desirable theoretical unity may be, one can identify strong forces that will continue to pull apart these two bodies of theory. He mentioned that the theory of finance is conducted almost entirely within the Arrow-Debreu contingent claim framework such as the three pillars of modern financial theory which have been reformulated in contingent claim terms. Besides, he wrote that the applications of the Arrow-Debreu contingent claim formulation of a competitive equilibrium for an economy operating through time is subjected to stochastic shocks. In the end, he concluded that the power in applications of the contingent claim point of view is obviously evident in finance, will be as usefully applied to monetary theory. One more thing that he suggested is the source of this power which is the ability of this framework to permit the reduction of the study of asset demands to the study of demands for the more fundamental attributes to which assets are claims. 3.6 Others Apart from those above categories, Arrow-Debreu Models can be used for other purpose. For instance, it acts as a fundamental to explain the pattern of trade, to formulate the fixed price equilibrium or to find out whether the financial markets are arrangements for risk-sharing. Furthermore, it is extended further to analyze the restrictions and developed further that include a sequential market model with the financial markets. One of the section in the journal Differences of opinion in financial markets written by Hal R. Varian (1989), an Arrow-Debreu contingent consumption model of the sort studied by Milgrom and Stokey (1982) was examined. Through the mathematical calculation and the analysis of the consequences for assets market equilibrium based on the Arrow-Debreu model, it ends with a similar result, prices are determined by information, but the pattern of trade is determined by differences in opinion. In order to establish the important difference for trade is the opinion, he analyzed some of its consequences for assets market equilibrium. At last, he stressed that the volume of trade in an Arrow-Debreu model is due primarily to the differences of opinion. Next is the Claus Weddepohl (1983). He discussed and addressed the development of the theory of general equilibrium during the last twenty-five years. Considering and analyzing the Arrow-Debreu model with futures markets, he showed the result that this model gives rise to temporary equilibrium models. He stated that the fixed price equilibrium models are formulated through the study of these models and the study of the stability of price adjustments. The simple fixed price equilibrium model as defined by Barro and Grossman (1971) and Malinvaud (1977) is what he emphasized in the journal Developments in the Theory of General Equilibrium. Ouattara (1994) applied the Arrow-Debreu model to the small villages in the McCarthy Island Division South (MID-South) of The Gambia to find out whether financial markets are arrangements for risk-sharing. The main objective of risk-sharing is to verify that observed consumption patterns are consistent with patterns predicted by insurance models. The Arrow-Debreu full insurance model focuses on consumption smoothing across different states of nature at each particular point in time through state-contingent contracts. In the end of his research, the results supported the hypothesis that state-contingent loans are accepted in rural Gambia and there is full risk-sharing among participants in the financial markets. Peter H. Friesen (1979) extended the Arrow-Debreu model to financial markets which include the sequential market model. It is done by dropping the contingent contracts from the Arrow Debreu model, leaving only a sequence of spot markets for commodities. This leads to an inefficient market structure but efficient for sequence of stock markets and option markets. The purpose of the journal The Arrow-Debreu Model Extended to Financial Markets is to develop further the Arrow-Debreu model. The method that he used is through the extension of Arrow (an equilibrium in one model was constructed from that of another). For example, financial securities, Arrow certificates can be constructed from options on common stock and the advantage in the general equilibrium theory of financial markets, are the proofs of using Arrows method. On the other hand, the sequential market model for which equilibrium are constructed from the Arrow-Debreu equilibrium derived in Debreu (1951). From the fact that Arrow-Debreu equilibrium exist, it follows by construction that equilibrium for this model exists. It also follows that the equilibrium is efficient. Peter (1979) stressed that such models are used both to study financial markets and to explore the effects of a gradual resolution of uncertainty. Lastly, he concluded that it not only shows the close relationship between these two models but also reminds us that the potential value of finite-horizon Arrow-Debreu models for the study of sequential economies. Investors in financial markets face several restrictions apart from wealth constraints. So, we have the right to understand the restrictions in a general competitive equilibrium. Based on the journal Contributions to Intertemporal Models in Financial Economics written by Ramu Gopala (2008), the Arrow-Debreu model was extended further for the usage of analyzing those restrictions. He indicated that the traditional Arrow-Debreu model can be extended to a more realistic setting. Following Angeloni and Cornet (2006), this extension of the Arrow-Debreu model in the multi-period setting with restricted participation is established. Arrow-Debreu model was used to elaborate, to compare, to extend and to emerge for shaping those important finance theories. 4.0 Supporting Theories In this section, the theories that are related to Arrow-Debreu model will be further discussed. Apart from that, in order to let us have a more complete picture about this model, the theories that we displayed previously will also be stated and explained, as well as deliberated further. 4.1 General Equilibrium Theory General equilibrium theory is the core of economic theory. Before the Arrow-Debreu model is established, this theory has been proposed by L. Walras (1874). As reported by Arrow and Debreu (1954), he was the one who first formulated the state of economic system at any point of time as the solution of a system of simultaneous equations representing the demand for goods by consumers, the supply of goods by producers, and the equilibrium condition that supply equal demand on every market. In other words, Walras (1874) is the pioneer who first attempts to model the price for a whole economy. Walras uses mathematics to construct a complete structure of general equilibrium theory. This research has lead to results in contribution to neoclassical economics. However, the mathematics that he used to set up the foundation of this theory was unstable due to the existence of general equilibrium does not solved in a satisfactory manner. Hence, theoretically, if he cannot prove this existence, then this theoretical system will become meaningless. General equilibrium theory is therefore developed and improved by Vilfredo Pareto (1897), John R. Hicks (1939), John Von Neumann (1937), Paul A. Samuelson (1941), Kenneth J. Arrow (1954), Gerard Debreu (1954), Lionel W. McKenzie (1954) and others, which becomes an integral part of economics. 4.2 Fundamental Theorems of Welfare Economics Before the Arrow and Debreu began their famous collaboration, both of them had proved the same theorem which is the Fundamental Theorems of Welfare Economics or First and Second Welfare Theorems. There are two fundamental theorems of welfare economics. The first theorem states that every general equilibrium involves a Pareto efficient allocation of resources under the three assumptions. The three assumptions are if there are no externalities, all agents are price-taker, and prices for each good are known to each agent. While the Pareto efficient named after Vilfredo Pareto (1897), is a type of efficiency that results if one person cannot be made better off without making someone else worse off. The First Welfare Theorem is viewed by many economists as the formalization of Smiths Invisible Hand. As Makowski and Ostroy (1995) stated, it provided a set of sufficient conditions for a price system to efficiently coordinate the economic activity. Besides, this theorem supports the case for non-intervention in ideal conditions. For instance, the outcome is said to be Pareto efficient if we let the markets to do the work. The Second Welfare Theorem says that if preferences are well-behaved (especially convex) then every Pareto efficient allocation can be supported by a general equilibrium set of prices, given a suitable reallocation of the endowment. Referring to Varian (1985), this theorem effectively said that if you think an equilibrium is unfair, just move the endowment of the economy and a different general equilibrium will be obtained. Due to the convexity, the second theorem is stronger than the first theorem. The difference between these two theorems is the second theorem requires existence of general equilibrium from all endowment points, whereas the first theorem required only that if a general equilibrium existed it was efficient. According to Michael A. S. Guth (1994), Arrow (1951) provided a rigorous proof of the connection between competitive equilibrium and Pareto optimal. Gerard Debreu (1951) introduced convex analysis methods into welfare theory and independently proved the same theorems. As a result, these theorems have an important relation to Arrow-Debreu model; the existence of solutions to a competitive equilibrium is finally solved. 4. 3 Theories in relation to the Restriction of General Competitive Equilibrium Previously, the Arrow-Debreu model was used to analyze the restrictions. In order to understand those restrictions in the general competitive equilibrium framework, tracing back those following theories is necessary for us to know how the Arrow-Debreu model was used to be compared and proved other economic theory. 4.3.1 Radner Equilibrium Roy Radner said that the Arrow-Debreu model is not originally put forward for the case of uncertainty, but a powerful device introduced by Arrow (1953), and further elaborated by Debreu (1953), enabled the theory to be reinterpreted to cover the case of uncertainty about the availability of resources and about consumption and production possibilities. Hence, he extends the Arrow-Debreu equilibrium and forms an economic concept-Radner Equilibrium. Radner (1972) is the first who considers the general equilibrium with incomplete markets. He shows that unlike the Arrow-Debreu models, the possibility of trading commodity futures for every contingency is sufficient to enable income transfers across all spots. In addition, the assumption that he made, short-sales of these contracts are limited for every agent, is a driving force in his proof of the existence of a general financial equilibrium. This can be seen as the first attempt to incorporate this idea in their asset market participation. 4.3.2 Concept of Constrained Pareto Optimality Radner Equilibrium, however, is imperfect. Oliver D. Hart (1975) uses some disturbing but perceptive counter-examples to display some of the weaknesses of Radners concept of equilibrium. He showed that existence of such an equilibrium cannot be proved under the standard Arrow-Debreu assumptions. He specified that when the asset returns are price dependent, the market sub-space may not be continuous in the spot prices which may lead to discontinuous demand functions. This reason causes a failure of the existence of Radner equilibrium. In other words, an equilibrium may not be Pareto efficient in the case of incomplete markets which shapes the concept of Constrained Pareto Optimality. 4.4 Limitations of Arrow-Debreu Model Although the Arrow-Debreu model has many influences on either economics or finance, however, there are the limitations. There are three limitations of Arrow-Debreu model. In this model, it excludes the trade in shares of firms because the stock certificate is not an Arrow-Debreu commodity. When the descriptions are so precise that further refinements cannot yield imaginable allocations which increase the satisfaction of the agents in the economy, then the commodities are called Arrow-Debreu commodity. Trading in shares of firms cannot be classified as Arrow-Debreu commodity due to its possession entitles the owner to additional commodity which he need not obtain through exchange. Bankruptcy is not allowed in Arrow-Debreu equilibrium. All agents must meet their budget constraints. In a game theoretic formulation of equilibrium, it is achieved by enforcing an infinite bankruptcy penalty. Since every Arrow-Debreu equilibrium is Pareto efficient, there would be no benefit in reducing the bankruptcy penalty to the point where someone might choose to go bankrupt. Money does not appear in this model. Although the reasons for the existence of money in real life are already taken care of in the Arrow-Debreu model, money does not affect the allocations of commodities. Therefore, there is no point in making the role of money explicit in the Arrow-Debreu model. 5.0 Conclusion In fact, Arrow-Debreu model is not simultaneously created by K.J. Arrow and Gerard Debreu. Debreu is the one who extends further the Arrows pure exchange model in several important ways. Their contribution in formulating Arrow-Debreu model has laid a foundation for economic theory. The application of Arrow-Debreu model emphasizes more on the general competitive equilibrium framework of the economics. From the studies, we notice that most of its application majoring in the financial economics is act as a fundamental theory or economy in shaping the asset pricing model. Other functions like analyzing the market structure, risk and etc, also show that the usefulness of this model. Besides, it is applicable in evaluating the impact of all uncertainties with a general equilibrium structure. The analyzers use a series of mathematical equation to prove their statements. The pioneering contributions of Arrow and Debreu have forever changed the way economic theorists formulate uncertainty models. After more than forty years of analysis and extensions, their general equilibrium framework and approach continues to be the starting point for new theories on the operation of competitive markets under uncertainty. As a conclusion, it is undeniable that the Arrow-Debreu model had turn on a new leaf in the history of economics. It is the modern concept of general equilibrium in economics which indirectly set up several important theories. Nothing is perfect in this world. Of course, Arrow-Debreu model as well. Some assumptions have to be made. Criticism also may happen. However, those brilliant economists or researchers still can use this model to formulate their own theory and then ends up with a perfect ultimate theory in both economics and finance. Lastly, mistakes, problems, and weaknesses should be pointed out, corrected and improved so that Arrow-Debreu model can be applied and developed effectively.
Friday, October 25, 2019
Lipids :: essays research papers
Lipids The subject I will cover is lipids. I will tell you about the description of it’ s organic compound. I will tell you where it is found. I will tell you what the uses are in plants and animals. I will also tell you about it’s chemical structure and give examples of types of these compounds, such as cholesterol. The organic compound of lipids have many similarities. They are almost always greasy, fatty, oily, or waxy. They do not dissolve in water, but they do in other organic solvents. This is like if you get grease on your hands it is hard to wash of because it seems to repel the water. You can find lipids in many places. They are usually in fatty foods like butter, salad dressing, and cooking oils. They can also be found inside of animals as the form of fat. Lipids are always found in fat because when you get a build up of lipids it forms fat. Lipids have many uses amongst plants and animals. The main use of these are for energy and storing energy. When they store energy they make triglycerides also known as fat. There are also many other uses such as insulation and protection. They are also used in making cell membranes. They make it so that the cell can maintain it’s shape by keeping water and water-soluble compounds from passing through it. The lipids that are waxy are usually used to make protective coatings on the surface of plants and animals. Since a lipid is an organic compound it contains carbon. They also contain hydrogen and oxygen, but in some very complex chains there is also phosphorus and/or nitrogen. Lipids are made by the dehydration synthesis of glycerol and fatty acids. This is when three molecules of fatty acids combine with one molecule of glycerol by taking water out of the solution. Lipids are always huge molecules, which means they have a lot of energy like twice as much as sugar. This is because more energy goes into making it so you get more out of it when it is broken down. The following is what a lipid would look like. When lipids are made they can produce many different compounds. One of those is phospholipids. These are what help make cell membranes and keep water out of them. They also make a very common lipid and that is cholesterol. Cholesterol is and extremely complex lipid. It builds up on the inner walls of the arteries. Lipids :: essays research papers Lipids The subject I will cover is lipids. I will tell you about the description of it’ s organic compound. I will tell you where it is found. I will tell you what the uses are in plants and animals. I will also tell you about it’s chemical structure and give examples of types of these compounds, such as cholesterol. The organic compound of lipids have many similarities. They are almost always greasy, fatty, oily, or waxy. They do not dissolve in water, but they do in other organic solvents. This is like if you get grease on your hands it is hard to wash of because it seems to repel the water. You can find lipids in many places. They are usually in fatty foods like butter, salad dressing, and cooking oils. They can also be found inside of animals as the form of fat. Lipids are always found in fat because when you get a build up of lipids it forms fat. Lipids have many uses amongst plants and animals. The main use of these are for energy and storing energy. When they store energy they make triglycerides also known as fat. There are also many other uses such as insulation and protection. They are also used in making cell membranes. They make it so that the cell can maintain it’s shape by keeping water and water-soluble compounds from passing through it. The lipids that are waxy are usually used to make protective coatings on the surface of plants and animals. Since a lipid is an organic compound it contains carbon. They also contain hydrogen and oxygen, but in some very complex chains there is also phosphorus and/or nitrogen. Lipids are made by the dehydration synthesis of glycerol and fatty acids. This is when three molecules of fatty acids combine with one molecule of glycerol by taking water out of the solution. Lipids are always huge molecules, which means they have a lot of energy like twice as much as sugar. This is because more energy goes into making it so you get more out of it when it is broken down. The following is what a lipid would look like. When lipids are made they can produce many different compounds. One of those is phospholipids. These are what help make cell membranes and keep water out of them. They also make a very common lipid and that is cholesterol. Cholesterol is and extremely complex lipid. It builds up on the inner walls of the arteries.
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