Cultural Dimensions Essay

1)Give the definition and objectives of â€Å"your† cultural dimensions (what does the dimension measure? what do you want to measure? For instance : ability to work in groups, individual empowerment †¦ (for the individual/collective dimension). Diffuse and Specific orientated cultures – The most apparent difference is the ability to separate private from professional life. In diffused cultures, the private and professional lives are closely linked whereas specific cultures keep them separate. Additionally, specific cultures promote directness, precision, and transparency. Also, people from specific orientated cultures are able to remove themselves from a situation in regards to principles and values. This means that specific orientated cultures encourage objectivity. This is in contrast with the diffuse orientated culture that is more indirect and highly subjective. Furthermore, it can be said that this culture is more informal and social-orientated. 2)Illustrate the dimension referring not only to the professional life. Describe situations in which the dimension may impact behaviors. For instance : when somebody cries in the classroom,†¦ (for the neutral/ affective dimension). For example, if a manager is invited to dinner by employees, in a specific-orientated culture, the manager might decline the invitation as he or she wouldn’t feel it is appropriate whereas in a diffuse orientated culture this might be seen as an opportunity to bring informality to the relationship. So in a company based in Germany, this invitation would be seen as inappropriate because Germany has a more specific culture whereas in Finland this wouldn’t necessarily be frowned upon as it is more diffuse orientated. 3)In order to measure â€Å"your† dimension among persons of different nationality, prepare a series or questions (MCQ or Yes/No type are easier to analyze).

Organizational Strategies and Chronological Order

Organizational Strategies and Chronological Order The word chronological comes from two Greek words. Chronos means time. Logikos means reason or order. That is what chronological order is all about. It arranges information according to time. In composition  and speech, chronological order is a method of organization in which actions or events are presented as they occur or occurred in time and can also be called time or linear order. Narratives and process analysis essays commonly rely on chronological order. Morton Miller points out in his 1980 book Reading and Writing Short Essay that the natural order of events - beginning, middle, and end - is narrations simplest and most-used arrangement. From Camping Out by Ernest Hemingway to The Story of an Eyewitness: The San Francisco Earthquake by Jack London, famous authors and student essayists alike have utilized the chronological order form to convey the impact a series of events had on the authors life. Also common in informative speeches because of the simplicity of telling a story as it happened, chronological order differs from other organizational styles in that it is fixed according to the timeframe of events which happened. How Tos and Who-Done-Its Because time order is essential in things like How-To presentations and murder mysteries alike, chronological order is the preferred method for informative speakers. Take for example wanting to explain to a friend how to bake a cake. You could choose another method to explain the process, but putting the steps in order of timing is a much easier method for your audience to follow - and successfully bake the cake. Similarly, a detective or officer presenting a murder or theft case to his or her team of police would want to retrace the known events of the crime as they occurred rather than bouncing around the case - though the detective may decide to go in reverse chronological order from the act of the crime itself to the earlier detail of the crime scene, allowing the team of sleuths to piece together what data is missing (i.e., what happened between midnight and 12:05 am) as well as determine the likely cause-effect play-by-play that led to the crime in the first place. In both of these cases, the speaker presents the earliest known important event or occurrence to happen and proceed to detail the following events, in order. The cake maker will, therefore, start with decide which cake you want to make followed by determine and purchase ingredients while the policeman will start with the crime itself, or the later escape of the criminal, and work backward in time to discover and determine the criminals motive. The Narrative Form The simplest way to tell a story is from the beginning, proceeding in time-sequential order throughout the characters life. Though this may not always be the way a narrative speaker or writer tells the story, it is the most common organizational process used in the narrative form. As a result, most stories about mankind can be told as simply as a person was born, he did X, Y, and Z, and then he died wherein the X, Y, and Z are the sequential events that impacted and affected that persons story after he was born but before he passed away. As X.J. Kennedy, Dorothy M. Kennedy, and Jane E. Aaron put it in the seventh edition of The Bedford Reader, a chronological order is an excellent sequence to follow unless you can see some special advantage in violating it. Interestingly, memoirs and personal narrative essays often deviate from chronological order because this type of writing hinges more upon overarching themes throughout the subjects life rather than the full breadth of his or her experience. That is to say that autobiographical work, largely due to its dependence on memory and recall, relies  not on the sequence of events in ones life but the important events that affected ones personality and mentality, searching for cause and effect relationships to define what made them human. A memoir writer might, therefore, start with a scene where he or she is confronting a fear of heights at age 20, but then flash back to several instances in his or her childhood like falling off a tall horse at five or losing a loved one in a plane crash to infer to the reader the cause of this fear. When to Use Chronological Order Good writing relies on precision and compelling storytelling to entertain and inform audiences, so its important for writers to determine the best method of organization when attempting to explain an event or project. John McPhees article Structure describes a tension between chronology and theme that can help hopeful writers determine the best organizational method for their piece. He posits that chronology typically wins out because themes prove inconvenient due to the sparsity of occurrences that relate thematically. A writer is much better served by the chronological order of events, including flashbacks and flash-forwards, in terms of structure and control.   Still, McPhee also states that theres nothing wrong with a chronological structure, and certainly nothing to suggest its a lesser form than thematic structure. In fact, even as long ago as Babylonian times, most pieces were written that way, and nearly all pieces are written that way now.

How to Reduce Your Financial Stress in College

How to Reduce Your Financial Stress in College For many students, college is the first time they are in control of the majority of their finances. You might now suddenly be responsible for paying your own bills, working a job that you need to make ends meet, and/or making the scholarship money you get in August last through December. Unfortunately, these new financial responsibilities come within a context where money is often unusually tight. So how can you avoid being stressed about your financial situation while in college? Get a Job that Doesnt Stress You out If the responsibilities at your job are making you stressed out, its time to find another job. Make sure, of course, that your hourly wage is enough to help you meet your financial obligations. On that same note, however, your job shouldnt be providing a paycheck and causing you to seriously stress out. Look for a good on-campus job or one near campus that offer a relaxed work environment that is supportive and understanding of your life (and responsibilities) as a college student. Make a Budget The very idea of a budget often makes people think of having to sit down with a calculator, track every penny they spend, and go without the things they want the most. This, of course, is only true if thats what you want to make your budget look like. Set aside 30 minutes at the start of every semester to list what your expenses will be. Then figure out how much youll need each month to cover these expenses and what sources of income youll have (on-campus job, money from your parents, scholarship money, etc.). And then ... voila! You have a budget. Knowing what your expenses will be ahead of time can help you figure out how much money youll need and when. And knowing that kind of information will greatly reduce the financial stress in your life (not to mention having to bum off of your friends meal plans at the end of each semester when yours gets low). Stick to Your Budget Having an awesome budget doesnt mean anything if you dont stick with it. So check in with your financial self every week about how your spending looks. Do you have enough in your account to still meet the expenses youll have for the rest of the semester? Is your spending on track? If not, what do you need to cut down on, and where can you find some extra funds during your time in school? Understand the Difference Between Wants and Needs Do you need a winter jacket while in college? Of course. Do you need to have a brand-new, expensive winter jacket every year while in college? Definitely not. You may want to have a brand-new, expensive winter jacket each year, but you definitely dont need one. When it comes to looking at how you spend your money, make sure you differentiate between wants and needs. For example: Need coffee? Fair enough! Need coffee at $4 a cup at the coffee shop on campus? Nope! Consider brewing some at home and bringing it to campus in a travel mug that will keep it warm throughout your first class of the day. (Added bonus: Youll save your budget and the environment at the same time!) Cut out Costs Wherever Possible See how long you can go without spending any money, either with cash or through your debit and credit card(s). What were you able to live without? What kinds of things could be cut from your budget that you wouldnt miss too much but that would help you save money? What kinds of things could you easily do without? What kinds of things are expensive but not really worth what you have to pay for them? Saving money in college might be easier than you first think. Keep Track of Where Your Money Goes Your bank may offer something online or you can choose to use a website, like mint.com, that helps you see where your money goes each month. Even if you think you know where and how you spend your money, actually seeing it graphed out can be an eye-opening experience―and key for you to reduce your financial stress during your time in school. Avoid Using Your Credit Cards Sure, there can be times to use your credit card in college, but those times should be few and far between. If you think things are tight and stressful now, imagine what theyd be like if you racked up a lot of credit card debt, couldnt make your minimum payments, and had creditors calling to harass you all day long. While credit cards can be good in a pinch, they should definitely be a last resort. Talk to the Financial Aid Office If your financial situation in college is causing you significant stress, it may be because youre in a situation that is financial unsustainable. While most students experience tight budgets, they shouldnt be so tight that the stress they cause is overwhelming. Make an appointment to talk to a financial aid officer to discuss your financial aid package. Even if your school cant make any changes to your package, they might be able to suggest some external resources that can help you with your finances―and, consequently, with your stress levels. Know Where to Get Money in an Emergency Some of your financial stress may be coming from not having an answer to the What will I do if something major happens? question. For example, you might know you dont have the money to fly home if theres a family emergency, or you might not having the money to fix your car, which you need to get to school, if you were in an accident or needed a major repair. Spending a little time now to figure out where to get money in an emergency can help alleviate the stress that comes from feeling like youre walking on thin financial ice all of the time. Be Honest With Your Parents or Sources of Financial Support Your parents may think theyre sending you enough money or that your taking an on-campus job will distract you from your academics, but the reality can sometimes be a little different. If you need to change something in your financial situation, be honest with those who are contributing to (or depending on) your college finances. Asking for help might be intimidating but it might also be a great way to ease up on the factors causing you stress day in and day out. Make Time to Apply for More Scholarships Every year, its impossible to miss the news headlines that report on just how much money in scholarships goes unclaimed. No matter how tight your time is, you can always find a few minutes here and there to find and apply for more scholarships. Think about it: If that $10,000 scholarship only took you 4 hours to research and apply for, wasnt that a good way to spend your time? Thats like earning $2,500 an hour! Spending half an hour here and there to find scholarships can be one of the best ways to spend your time and reduce, over the long-term, the financial stress in college. After all, arent there more exciting things youd like to be focusing on?

The Awakening by Kate Chopin Research Paper Example | Topics and Well Written Essays - 1250 words

The Awakening by Kate Chopin - Research Paper Example The controversial ending of the novel shall also be looked into and problematized. Its implications and how it shapes the critic’s response to the character shall be analyzed in this paper. Critical responses drawn from famous essays on The Awakening shall shape the views put forth by this paper which shall be sought to be modified and incorporated. These views shall be used to support and further the arguments that shall be put forth in this paper. Kate Chopin’s The Awakening Kate Chopin’s work, at the time of its publication (the late nineteenth century), created quite a stir. It was one of the first novels that portrayed a woman, comfortably placed in life, who chooses to rebel against the lack of choice that life presents her with. Chopin’s protagonist, Edna Pontellier, is a woman who is married to a wealthy businessman, who according to a patriarchal society, would be considered to be a dutiful and loving husband. He provides Edna with every material comfort imaginable and is a very caring husband; still, Edna chooses to rebel. Conservative reviewers of the time could not digest such an action by the protagonist of a well-known author. Edna’s rebellion, however, is not against the comforts that her life provides her; it is against a system that refuses to accord her the kind of respect that she feels she deserves: that which is given by the society to an artist, a respect different in its nature from that which was provided to a woman merely for the fulfillment of maternal and wifely duties. Critics like Margo Culley have talked about how Edna is a â€Å"solitary soul† (Culley 247). She talks of how Edna’s solitude leads her to explore new areas of activity that eventually lead to her sexual awakening. This leads her to enter into relationships with other men, in what she initially believes to be steps that are liberating. However, she later realizes that she represented nothing but a conquest for men like A lcee Arobin. This, Culley remarks, forces her back to her solitude that follows a recognition of the failure of both forms of awakening, social and sexual, to free her from the oppressive social framework that she inhabits. Edna’s awakenings are thus always accompanied by a disillusionment with the mode of awakening that she adopts. This problem needs to be analyzed at length. Going over the main events of the novel might be helpful, in this regard. Edna Pontellier, disillusioned with her life as a married woman who seeks fulfillment only through her roles as a wife and mother, distances herself from her husband and from her motherly duties. She undergoes a sexual awakening that leads her to extra-marital affairs that fail to fulfill her needs. She moves into another house in order to lead what she considers an independent life. This attempt too, fails her. She eventually commits suicide, driven to desperation by her failed attempts to attain respectability in a society that refused to provide women with it. Edna’s problem can be seen as the problem of a woman who fails to break out of the life that she creates for herself. In as much as this is true, Edna is as much of a culprit as the society. Edna, throughout the novel, is unwilling to break free of the luxuries that life provide for her. Even when she chooses to move into a new apartment, she does so using her inheritance from her father, which is again, patriarchal wealth, part of a social system that Edna tries to break out, in the

GNLD and its product Nutritional Supplements Assignment

GNLD and its product Nutritional Supplements - Assignment Example It is through the fast changing health industry that new ways and methods of diagnosis and promotion of better health has been implemented. All these proceedings have brought about patient care, worker efficiency, and hence better health. To achieve these objectives, several companies like GNLD, which manufacture and sell nutritional food supplements, have been introduced. This product has however been impacted by market forces as discussed in this paper. Degree of Rivalry With the increased need for better health, and the extensive research being carried out in the health industry, rival firms have increased competition drawing the profits that GNLD used to make initially. This has made the competition imperfect; hence, each other firm is struggling to achieve competitive advantage and a higher market share than its rival company. In addition, the controversy on the quality of products of the increasing nutritional food supplements companies and slowed down the market growth. This h as consequently led to need for storage of the products hence high cost. Further, some of the products are perishable thus; the company decides to sell the products at relatively lower prices. The exit barrier in any health related firms are high. This is because the costs of plants and machinery cannot be forgone thus the firm decides to keep competing no matter the state in the market. Though successful, GNLD has been forced to keep competing due to this factor (http://www.mlm-home-business-training.com/GNLD-Int-mlm-leaders-call-team-money-training-scheme-scam/secretsuccess.htm). Threats of Substitutes In a free market economy, restriction of entry into, and exit out of the market is not prohibited. This means that competitors with related commodities will venture in to the market. This threat will definitely occur since the demand of the products of GNLD has been affected by the prices changes in substitute product. For instance, a survey carried out in Kenya showed that GNLD pro ducts are highly affected by the prices from TIASHI, a competing food supplement company. From the research, it was found out that to become part of the marketing team in GNLD, a sum close to $36 is required then the individual should purchase products of high value. For TIASHI, a sum of $18 is required and the initial purchase is relatively lower. This determines the prices at which each the products are sold. Evidently, the close substitute products have constrained the ability of GNLD to raise prices (http://www.healthybusiness.co.za/GNLD%20Products%20Guide/introduction/i3.html). Buyers bargaining power This is the power potential buyers have on any industry that is producing commodities. In many market structures, the forces of demand and supply determine prices of commodities. It is obvious that buyers will expect such market structures. Since GNLD does not exist as a monopoly, the prices at which the food supplements are sold should be dependant of the market mechanisms. On th e contrary, the food supplements from GNLD have fixed prices. The only advantage extended to the buyer is the ability to buy smaller quantities. This means that the buyer does not have bargaining power. It is thus possible in such a case to shift to other substitutes which give the

Business Law (Interbational) Essay Example | Topics and Well Written Essays - 1250 words

Business Law (Interbational) - Essay Example Schafer (31-46) explicitly describes the current rules applicable to the taxation of companies operating internationally. For examples, multinational companies or enterprises, and firms sited in another locality different from the residence of the people in charge of the companies’ administration. The following taxation principles are in operation: Establishment of framework for international taxation: Schafer (31) strongly believes that the first step in determining what kind of taxes to pay to which locality begins by establishing the framework for the taxation. The importance of the framework is to stipulate: one, whether a jurisdiction is entitled to tax income from an internationally run firm; two, the allocation formula among the entities that could claim the rights to the tax income; and, finally, preventive measures to avoid unduly double taxation. Jurisdiction issue: Schafer (33) defines a jurisdiction as the â€Å"company’s residence country where its main activities are concentrated, and the company utilizes the benefits provided by the residence country†. Some of the benefits the residence country (a tax haven, possibly) provides to the company may include economic resources, security or legal, financial, physical and social infrastructures that could be used at a cheaper cost compared with the expensiveness of such benefits at the company owners’ home countries, as in the case of the three friends from OECD countries (Schafer 33). And tax incomes are traditionally paid to the jurisdiction where is company is situated. Technically, a company’s jurisdiction could be described as the place where the company is registered or incorporated. In case it is unclear to ascertain the exact jurisdiction of a company based on its legal registration, the company’s place of economic allegiance, that is , where its main management structure and business operation reside could be taken as the

The Neoclassical Synthesis Hicks Economics Essay

The Neoclassical Synthesis Hicks Economics Essay Those who are strongly wedded to what I shall call the classical theory, will fluctuate, I expect, between a belief that I am quite wrong and a belief that I am saying nothing new. It is for others to determine if either of these or the third alternative is right. (ÃŽÅ ¡eynes, General Theory, p. v) It is usually considered as one of the most important achievements of the Keynesian theory that it explains the consistency of economic equilibrium with the presence of involuntary unemployment. It is, however, not sufficiently recognized that, except in a limiting case to be considered later, this result is due entirely to the assumption of rigid wages and not to the Keynesian liquidity preference. (Modigliani, 1944, p. 65) 11.1 Introduction Many economists, soon after the publication of the General Theory (1936), set out to formulate and, at the same time, to clarify the difficult and often confusing content of the book. Among the first models that were specified was that of John Hicks (1937 and 1983), which was to constitute the backbone of what today came to be known as macroeconomics.  [1]  In his article Hicks sought to express the central propositions of the General Theory in terms of equations and graphs in the effort to illuminate the relation between the theory of effective demand and liquidity preference. Furthermore, Hicks clarified these relations with the aid of two curves the SI and the LL, which later became known as the IS-LM curves. Hickss model became particularly popular in the US through the work of Paul Samuelson (1948) initially and subsequently through Alvin Hansen (1953). These two economists contributed more than anybody else to the popularisation of the Keynesian analysis and way of thought. The IS-LM conceptual apparatus has displayed remarkable longevity and resilience to various critiques and since the late fifties or early sixties continues to be part of the formal education of economists. At the same time, the IS-LM model plays a significant role by virtue of the fact that macroeconomic analyses, regardless of the approach, are cast to a great extent, in terms of the IS-LM representation of the economy. This is not to imply that the IS-LM model is without its problems; on the contrary, many economists expressed scepticism on the validity of the IS-LM as a representation of the General Theory and the way in which the economy works.  [2]   In what follows we present and evaluatse the Hicksian IS-LM model and continue with Keyness reaction to the Hicksian restatement of the General Theory. Next, we introduce Modiglianis version of the Keynesian model and the chapter ends with some concluding remarks. 11.2 Hickss Analysis of IS-LM Hickss analysis focuses on the relation between savings and investment and seeks to establish the simultaneous determination of income and the rate of interest in both the real and monetary economy. According to Keyness analysis in General Theory income constitutes the principal variable in his analysis; nevertheless one would continue to be in the spirit of Keynes by considering the important role of the rate of interest. Thus, Hicks argued that investment (ÃŽâ„ ¢ ) is a function of the rate of interest (i ) and also income (Y). Formally, we write the following function: I=I(i, Y) Similarly, for the saving function (S ), we have: S=S(i, ÃŽÂ ¥) The equilibrium condition is: I=S From the above equality, we derive the following particular functional formalisation, which is called IS and it is defined as the locus of points that determine a relation between the rate of interest and the level of income, when investment and savings are equal to each other. The IS curved is formed in the way we show in Figure 1, where we have the saving and the investment functions for each income level. i i2 i2 i1 I1=S1 I2=S2 I, S Y1 Y2 Y i A A B B I(Y1) I(Y2) S(Y1) S(Y2) IS (a) (b) Figure 1. Equilibrium in the Goods Market and the IS Curve Let us suppose that we are in an initial equilibrium point such as A and let us further suppose that income increases from Y1 to ÃŽÂ ¥2. It follows that the savings and investment schedules-both have positive their first derivatives with respect to income-shift to the right and their intersection at point Î’ determines the new equilibrium point. It is important to stress that the savings function is much more sensitive to variations in income, and therefore it shifts to the right by more than the investment function.  [3]  The two equilibrium points (i1, Y1) and (i2, Y2) are portrayed in Figure 1(b). In a similar fashion, we generate a series of such points, which when connected form the IS curve.  [4]   Hicks furthermore incorporates in his analysis the money market, where the supply of money (M) is exogenously determined, i.e., ÃŽÅ“=ÃŽÅ“0 /P, where ÃŽÅ“0 is the exogenously given nominal money supply and P is the price level. The demand for money depends on income and the rate of interest, i.e., L=L(i, Y). By invoking the balancing condition M=L, we arrive at M0=L(i, Y ) Figure 2 illustrates the equilibrium position in the money market, where the supply of money, for reasons of simplicity and clarity of presentation, is depicted with a vertical line indicating its exogenous character.  [5]  The demand for money, as we know, is inversely related to the rate of interest, a relation whose details have been analysed in the previous chapter. When income increases it follows that much more liquidity is required for the needs of transactions and therefore the interest rate will increase for any given level of money supply. In terms of a graph we have: (a) (b) M=M0/P L1(Y1) L2(Y2) LM Y i i i1 i1 i2 i2 M/P Figure 2. Equilibrium in the Money Market and the LM Curve We observe that with the supply of money given the demand for money for transaction purposes is directly related to income. The crucial question here is that while we refer to the money market the discussion is in terms of the bond market. In particular, we know that the excess demand for any good leads to an increase in its price until excess demand becomes zero and thus we get the equilibrium point. Since in the case of money market the equilibrium interest rate is derived in the market for bonds (see ch. 9), then how can the same interest rate equilibrate the money market? In Keyness analysis it seems that there is an implicit portfolio stock exchange constraint, which can be written as follows: (L M ) + (Bd Bs) = 0 Where Î’ symbolises the bond market, while the superscripts d and s symbolise the demand for and the supply of bonds, respectively. Consequently, we have the total demand for wealth (L + B d) equal to its supply (M + Bs). If we, further, suppose Walrass Law, then the above equality necessarily holds and if the rate of interest brings equilibrium in the market for bonds then on the basis of Walrass Law we conclude that equilibrium will be also established in the money market, that is L = M. As a consequence, we can follow Keynes, who argued that interest rates are determined in the money market. Because of the Walras Law, equilibrium in the bond market and equilibrium in the money market is one and the same. If, for example, i > i*, then Bd > Bs and because of the stock constraint we get L Returning to the above equilibrium relations, we end up with a system of four equations and four unknowns: Y, i, I, S. The equations IS and LM represent the reduced form of the above system of simultaneous equations, whose solution gives the equilibrium income together with the equilibrium interest rate. In the same figure, we present the interest rate that corresponds to the liquidity trap (iLT), where the demand for money is infinitely elastic. Consequently, the LM curve is essentially the solid line. i IS LM Y iLT i* Y* A B S>I M S>I M S M>L I II IV III S M>L Figure 3. Equilibrium in the Market for Goods and Money The intersection of the two curves at point B determines the equilibrium pair of interest rate and income. Any point above the IS curve indicates excess supply of goods and every point below the IS curve indicates excess demand for goods. As for the LM curve, every point to the right indicates excess demand for money and every point left to the LM curve indicates excess supply of money. The intersection of the two curves defines four quadrants, which are portrayed in Figure 3 above and in each quadrant we indicate the excess demand or supply in the goods and money markets. The mechanism that establishes equilibrium in the economy works as follows: let us suppose that for some reason the economy is out of equilibrium at a point on the quadrant II. In such a case, savings exceed investment and thus income has a tendency to decrease, while the demand for money is greater than the supply and the interest rate tends to increase. The changes are expected to lead the economy towards equilib rium at point B. In an analogous way, we can describe the mechanism that restores equilibrium at points in the other quadrants and this is left as an exercise. 11.3 Hicks and Keynes Hickss article was published in 1937, eight months after the publication of the General Theory. Keynes already knew the content of the article since he was among the first that the article was given to for comments before its publication to the Economic Journal. Keynes never disapproved directly and explicitly the presentation in terms of the IS-LM apparatus. Don Patinkin (1922-1995) in a series of articles argues the fact that Keynes never said anything negative for the formalisation of his theory by Hicks and that this ipso facto implies an adoption of this presentation on his part (Patinkin, 1990). If Keynes disagreed then he would have every reason to emphatically express his disagreement. After all Hickss presentation in a sense was provocative, since Keyness General Theory in it was viewed as a special case of the neoclassical true general theory. Post Keynesian economists claim that the fact that Keynes did not exercise a negative critique can be attributed to his idiosyncrasy that would not pay attention to anyones writings which might concern his General Theory. On the other hand, Keynes did not have any reason, to express, at least in the beginning, his strong disagreement to Hickss presentation. It is possible that he did not think that Hickss article would meet the success that it finally met (Put footnote 6 here).  [6]  It is certain that he disagreed with Hickss view as this can be judged by a careful reading of his correspondence with Hicks and from the article that he wrote in the Quarterly Journal of Economics (1937), where he summarised his views. Specifically, he placed special emphasis, once again, on the fact that economies are characterised by uncertainty. Hickss approach, is characteristically different from that of Keyness. We know from Pasinetti (1973) that Keynes followed a sequential analysis starting from the marginal efficiency of capital, and then to the interest rate, to investment and through the investment multiplier to the equilibrium level of income. By contrast, in Hicks, all of the above take place simultaneously, as we show in Figure 3. Furthermore, Hicks in his formulation of the demand for money refers to a single interest rate. In the General Theory, however, we know that Keynes refers to two interest rates, the current and the expected in the long run. Consequently, Keyness analysis is in sharp contrast to Hickss and on top of all we have the issue of uncertainty that permeates the General Theory and is completely absent in Hickss presentation. Another important difference is that Hicks does not refer to the problem of unemployment equilibrium which is so central in Keynes-and really differentiates him from the classics-. Instead, Hicks locates the difference between Keynes and the classics to the interest rate and the issue of whether it increases with investment or not (Barens and Caspari, 1999, p. 219). According to Hicks, in periods of stagnation the interest rate is particularly low and under these circumstances speculators are not willing to hold non-liquid assets; consequently, their demand for money is so high that it absorbs whatever quantity of money is available. Thus, every increase in the supply of money is counterbalanced by a corresponding increase in the demand for money and the rate of interest remains constant. Monetary policy therefore is completely ineffective and it cannot restore the economy to full employment equilibrium. Hicks notes, there are conditions in which the interest-mechanism will not work. The special form in which this appears in the General Theory is the doctrine of a floor to the rate of interest [the liquidity trap] as Sir Dennis Robertson has called it. (Hicks, 1957, p.287) If we suppose that the economy is in the liquidity trap  [7]  , then a monetary policy, regardless of how active it might be, cannot shift the economy beyond the initial equilibrium point. In terms of Figure 4, if the economy is in equilibrium at point A, an expansionary monetary policy will shift the LM curve, for example to the position LM΄, with no consequence what so ever for the initial equilibrium position. LM LM A B C IS IS IS Y i iLT Figure 4. Equilibrium in the Markets for Goods and Money Consequently, Hicks in his model claims that the General Theory is not so general as Mr. Keynes thought, but rather a special case of the neoclassical theory, where the liquidity trap has a prominent position. The truth, however, is that the idea of the liquidity trap is very hard to pin point in the writings of Keynes; of course, there are some sporadic hints in the General Theory, as for example is the following: There is the possibility, for reasons discussed above, that, after the interest rate has fallen to a certain level, liquidity-preference may become virtually absolute in the sense that almost everyone prefers cash to holding a debt which yields so low a rate of interest. In this event the monetary authority would have lost effective control over the rate of interest. But whilst this limiting case might become practically important in future, I know of no example of it hitherto. (Keynes, 1936, p. 207)  [8]   However, Keynes does not discuss this case in any detail so as to claim that this is the hallmark of his theory. What is certain, however, is that the liquidity trap is more Hickss and subsequently Hansens (1953, pp. 122-3) idea rather than Keyness.  [9]  Consequently, the view that the liquidity trap is the essence of Keyness theory is due to the influence that the Hicksian model exerted on macroeconomics and much less to Keynes and his writings. Suppose, now, that for some reason investment increases, and then the increase in the rate of interest follows suit, a result which is consistent with neoclassical theory and with Hickss argument. It is true, that in Keynes the arrow of causality is different from that in neoclassical economics. However, it continues to be true that, under normal conditions, the interest rate increases when investment increases except for the case of the liquidity trap, where only income changes in every change in investment. The trouble, however, with Hickss view is that for Keynes the rate of interest is determined by monetary forces, while in the IS-LM framework the interest rate is determined by real forces. This is an issue that Keynes pointed out in his letter to Hicks. For example we read: From my point of view it is important to insist that my remark is to the effect that an increase in the inducement to invest need not raise the rate of interest. I should agree that, unless the monetary policy is appropriate, it is quite likely to. In this respect I consider that the difference between myself and the classicals lies in the fact that they regard the rate of interest as a no-monetary phenomenon, so that an increase in the inducement to invest would raise the rate of interest irrespective of monetary policy. (Keynes, 1973, p.80) A final point relates to the inclusion of current income in the investment function. Keynes objected to this idea for the reason that income was already included in the definition of the marginal efficiency of capital through the prospective yields. The following quotation from his letter to Hicks, shows that Keynes was not only acquainted with the IS-LM apparatus but also as a modern econometrician argued against the inclusion in the same specification of both income and interest rate. Specifically, Keynes notes: At one time I tried the equations, as you have done, with I in all of them. The objection to this is that it overemphasizes current income. In the case of the inducement to invest, expected income for the period of investment is the relevant variable. This I have attempted to take into account of in the definition of the marginal efficiency of capital. As soon as the prospective yields have been determined, account has been taken of income, actual and expected. But, whilst it may be true that entrepreneurs are over-influenced by present income, far too much stress is laid on the psychological influence, if present income is brought into such prominence. It is of course, all matter of degree. (Keynes, 1973, pp. 80-81). Barens and Caspar (1999) in their discussion of Hicks and Keynes note that while Hicks accepted all of Keyness points he nevertheless insisted in his own formulation for merely pedagogical reasons. 10.4 Modiglianis Synthesis Hickss model does not refer explicitly to the labour market; it is simply confined to demonstrating that there is equilibrium in only two markets that is the market for goods and the market for money. In his model, Hicks explicitly argues that the money wage as well as the general price level are exogenously given. Franco Modigliani (1944) extended Hickss model by including the labour market and the production function. Modigliani argued that the assumption of equilibrium with unemployment cannot be supported on the basis of the liquidity preference theory except for the particular case of the liquidity trap. In general, however, the Keynesian hypothesis can be supported on the assumption of the rigidity in the money wage. For Modigliani, the equilibrium in terms of the IS-LM model implies a pair of interest rate and money income that clears simultaneously the money and good markets. Consequently, we must take into account that the money income (ÃŽÂ ¥ ) is equal to the price level (P ) times the level of the real income (X ). As a result, we may write: Y=PX The level of real income (or output) is a function of the level of employment of labour (ÃŽÂ ). Consequently, we have: X=F(ÃŽÂ ) The level of employment in turn is determined at the point, where the marginal product of labour is equal to wage. Consequently, we have: w=PF-1 (ÃŽÂ ) Up until now we have a system of 7 equations (the three equations above together with the system of 4 simultaneous equations of the IS-LM) with 8 unknowns, that is I, S, i, Y, X, W, P. More specifically, we have the 4 equations of Hickss model: I=I(i, Y) S=S(i, Y) I=S M=L(i, Y) And the three new equations suggested by Modigliani: Y=PX X=F(ÃŽÂ ) w=P F -1(ÃŽÂ ) The system is overdetermined by one equation, the missing equation is the supply of labour. Modigliani in his article invokes Keyness assumption of the given money wage. More specifically, the money wage is given if, and only if, the economy is at a level of output less than full employment. We know that in the neoclassical analysis the supply of labour is a function of the real wage N=F(w/P) so the money wage can be written as w=F-1(N)P Formally, Modigliani stated his condition in the labour market in the following way: w=awo +bPF -1(ÃŽÂ ) Where, a=1, b=0 if ÃŽÂ  a=0, b=1 if ÃŽÂ  = ÃŽÂ f The last equation indicates that if the current employment in the economy is smaller than full employment (ÃŽÂ f ), then Keyness view for the rigidity of money wage holds indeed, that is we have (a=1 and b=0). Money wage is viewed as a datum a result of history or of economic policy or of both (Modigliani, 1944, p. 47). If, however, the economy is at full employment, then the money wage becomes flexible (a=0 and b=1) and the last equation becomes an ordinary supply of labour function. Consequently, the money wage will be determined from the supply of labour at the point of full employment. In Modiglianis presentation we find that the central assumption is the rigidity of the money wage, an assumption which, as with the liquidity trap does not really find any justification in the General Theory, where the nominal wage is being used simply to determine the price level. By contrast, in Modiglianis presentation the nominal wage has another important role to play. This is revealed if we express Modiglianis system of simultaneous equations in terms of wage units or alternatively in terms of labour commanded.  [10]  Thus, we have: investment is given in terms of labour commanded savings is given in terms of labour commanded equilibrium in the goods market equilibrium in the money market income given in terms of labour commanded the production function, which is by definition in real terms the real wage is equal to the marginal product of labour the supply of labour Hence, we have a system of 8 equations and 8 unknowns (I/w, S/w, i, Y/w, ÃŽ, N, w, P ). If, for a moment, we disregard the fourth equation and focus our attention on the remaining 7 equations, we observe that these can determine all the variables but one, that is the money wage. The result is that the supply of money determines the money wage; since this is the only variable that remains to close the system. Such a determination is due to the quantity theory of money. Consequently, Modiglianis system of equations is dichotomised into the real economy-which includes all the equations except the fourth one-and the money economy, that is the equation of equilibrium in the money market. The real economy gives solutions in real terms (7 equations with 7 unknowns, that is I/w, S/w, i, Y/w, X, N, w/P) while the money supply: determines the nominal wage, since the other variables are determined in the real economy. Consequently, the money supply determines the nominal wage and through the real wage it also determines the general price level. Thus, monetary policy may affect real magnitudes in the Keynesian model, contrary to Hickss reasoning according to which the money supply does affect the real economy. Modiglianis analysis leads to the conclusion that flexibility in prices and money wages establishes full employment in the economy. The mechanism that restores full employment works as follows: the existence of unemployment drives down nominal wages and therefore incomes fall. The demand for money for transaction purposes, being directly related to income, falls as well, and with a given supply of money the rate of interest falls as well. From thereon investment increases and the economy moves toward the full employment level of output. Modigliani managed to formalise Keyness argument about the results of the flexibility in money wages. It is important to stress that the pivotal variable in this formalisation of the theory of employment is the idea of inflexibility of money wage. A corollary of this theory is that the role of money is not neutral. For example, the increase in the supply of money affects the price level and reduces the interest rate and thus output and employment are increased. If the nominal wage were perfectly flexible, then moneys role would be neutral since it does not influence the interest rate i, or the liquidity preference L and output remains the same. Consequently, under conditions of a fully flexible nominal wage the increase in the supply of money leads only to an increase in the general price level. Consequently, ÃŽÅ“odigliani concludes that Keyness theory works only in case of inflexibility of the nominal wage. If, however, the money wage is flexible then we derive the usual neoclassical results, where the real economy determines the level of output and employment and the money economy determines the nominal variables of the economy. This does not imply a rejection of Keyness theory; on the contrary, economists accept the idea of inflexibility of the money wage as a stylised fact of modern economies and thus, Keynesian policy is viewed as both theoretically valid and necessary. The problem, however, relates to the theoretical consistency of the Keynesian system that once again became a special case of the general neoclassical model according to which the economy exhibits a sufficient flexibility in prices of commodities and the factors of production. 10.5 Summary and Conclusions In an overall evaluation of the two models we see that they both represent aspects or partial arguments of the General Theory. Nevertheless their major problem in terms of the General Theory is the simultaneity issue and also the treatment of uncertainty. In Hickss article we find an explanation of unemployment and recession as a result of the liquidity trap, which differentiates Keyness theory from the (neo)classical one. In Modigliani, by contrast, the recession is the result of the inflexibility of money wage and not of the lack of effective demand. Commenting on this kind of revision of the General Theory Paul Samuelson in the third edition of his popular text Economics, notes: In recent years 90 per cent of American economists have stopped being Keynesian economists or anti-Keynesian economists. Instead they have worked towards a synthesis of whatever is valuable in older economics and in modern theories of income determination. The result might be called neoclassical economics and is accepted in its broad outlines by all but about 5 per cent of extreme left-wing and right-wing writers. (Samuelson, 1955, p. 212). These efforts to cast Keynesian theory in terms of IS-LM, Samuelson called neoclassical synthesis, since it puts together the neoclassical analysis of investment and savings and the market for labour with the analysis of Keynes about the interaction between the money market and the real level of economic activity. The neoclassical synthesis became the dominant presentation of the General Theory. According to this view, when there is unemployment, then we have Modiglianis supply of labour function with a=1 and b=0, and as a result of the exercise of appropriate monetary and fiscal policy the economy approaches the level of full employment. When the economy approaches the level of output that corresponds to full employment, then once again the neoclassical theory becomes relevant. If our central controls succeed in establishing an aggregate volume of output corresponding to full employment as nearly as is practicable, the classical theory comes into its own again from this point onwards. (Keynes, 1936, p. 378) In general, economists of the neoclassical synthesis argue that although the economy returns to full employment through the price mechanism, nevertheless this is a long run process. Consequently, for immediate results active fiscal and monetary policies are necessary. Modiglianis ideas, which became the foundation of the neoclassical synthesis, and which essentially constitute a Marshallian partial equilibrium approach, became the object of criticism from Walrasian authors. They posited the following question: how is it possible to have equilibrium in all the markets but one? The protagonists of this critique of the neoclassical synthesis are Alex Lejonhufvund and Robert Clower, whose contributions we discuss in the next chapter. Other criticisms included the phenomena of unemployment and later of the stagflation in the late sixties or seventies. Some economists, the monetarists for example, tried to fix the weaknesses of the model and others such as the New Classical economists claimed that the premises on which the IS-LM framework is based are dubious, while New Keynesian economists in the 1980s revived the old Keynesian models by injecting realism and by basing them on microeconomic foundations which simply were not used in the initial models. Whatever happens to the current macroeconomic debates and the various criticisms launched against the IS-LM models, one thing is certain, that these will continue to be part of the formal education of future generations of economists. Questions for Discussion and Thought Write down the Hicksian system of equations. Draw a graph with the IS-LM system of equations and assuming a disequilibrium situation describe the dynamics of attaining equilibrium. To what extend does Hickss model represent Keyness General Theory? What was Keyness reaction to Hickss IS-LM representation of the General Theory? Discuss Modiglianis Neoclassical Synthesis. To what extent does his model differ from Keyness? What are the major similarities and differences between Hickss and Modiglianis models? Critically evaluate the following statement: I will assume all markets with the sole exception of the labour market are in equilibrium. Notes on Further Reading Hickss (1936) article is easy to follow, but the exposition of ideas (not visions) is really dry. The reader discerns an effort on the part of Hicks to express Keyness ideas in terms of equations and graphs without, however, the proper textual documentation. As we have mentioned, at the time that Hicks presented his article in the econometric society meeting at Oxford, two other related papers were presented in the same meeting by Meade and Harrod. Darity and Young (1995) present the details of these three articles a