Solar energy Essay Example | Topics and Well Written Essays - 2500 words - 1

Solar energy - Essay Example While comparing the solar energy with respective other renewable and non-renewable energy resources, solar energy remains advantageous in most situations. Non-renewable energy resources like coal and oil, solar energy is not only cheaper but environment friendly too. Solar energy is free from hazardous emissions that are mostly associated with the fossil fuel resources. Some of the perspective advantages of the solar energy are given below.2.1 Advantage:2.1.1 PredictableSolar energy remains predictable as solar thermal power generation units remain functional throughout the day without any influence of external resource or fossil fuel resource. In daytime, in the presence of sun, solar energy directly converts the thermal content of the solar energy into electrical energy, while some content of this thermal energy is used to enhance the temperature of molten salt that remains hot for longer terns and used to generate electrical energy during night.2.1.2 No Pollution and it save the e co-systems and livelihoods Solar energy is free from emission that are associated with the fossil fuel resources that solar energy is environment friendly and preserves the biodiversity of the planet by maintain the healthy environment for the humans. Solar thermal power generation units are thermal power generation units which require the thermal energy o change the water to super saturated stream for the generation of energy through turbines. Solar thermal energy requires no extra equipment in the power generation process.

Minimum Legal Drinking Age Essay Example for Free

Minimum Legal Drinking Age Essay Do you believe the drinking age should be lowered to allow eighteen year olds to consume alcohol, or should the legal age to drink alcoholic beverages stay at the age of twenty-one? Prior to 1984 you were, once you turned eighteen, in most states permitted to purchase alcohol. It was completely up to the state government. At age 18 they are legally an adult, and can therefore abide by their own rules and if they make a bad decision they have to pay the price. Why is it that as an adult you are permitted to purchase rifles, tobacco products, you can vote, enlist in the military, go to a casino, get a tattoo, body piercings, get married and even work in a bar but you can’t buy or consume alcohol? When you think of alcohol and eighteen year-olds what generally pops into mind is underage drinking, binge drinking, wild parties and date rape. But that is only the view of the irresponsible side of drinking, just as there is an irresponsible side of drinking at age twenty-one. At age eighteen you should be allowed to purchase or consume alcohol as you please, because you are legally an adult and responsible for your own actions. The Minimum Legal Drinking Age should be lowered to age eighteen. When you turn eighteen in the United States of America you are legally considered an adult. Until the 1984 Minimum Legal Drinking Age act you were allowed (at least in some states) to buy alcohol when you wanted. Subsequently to the passing of that law every state was forced to raise their minimum age to twenty-one. One of the men who voted for the 1984 Minimum Legal Drinking Age act, Morris E. Chafetz, stated that he â€Å"voted for it; it doesn’t work† and goes on to say that â€Å"it is the single most regrettable decision of my entire professional career†: â€Å"The reality is that at age 18 in this country, one is a legal adult. Young people view 21 as utterly arbitrary- which it is. And because the explanation given is so condescending- because they lack maturity and judgment, these same people who can serve on juries and sign contracts and who turned out in overwhelming numbers to elect our first black president- well they dont buy it. And neither do I.† (Chafetz 554-555) The Unites States military is one of the largest in the world, and has many bases and various stations throughout the entire world. At the age of 18 you must (if you are male) sign up for selective service (the draft) and you are eligible to enlist in the military regardless of your gender. Why is it that you can deploy to another country, fight for your country, get shot, lose limbs and have the memories of that with you for the rest of your life, but you can’t purchase alcohol? If you are old enough to risk your life to fight for your country and fight for the freedoms of this country then you should be able to go buy a beer at the bar with your buddies. Jeff Rainforth, a man who ran for congress, said that â€Å"Since the age was raised, many young adults have drunk more abusively than in the past. Like national Prohibition, it was been counter-productive. Raising the drinking age brought about more problems than it solved.† and went on to say that he recommends that is the legal drinking age was not lowered he recommends that military members can not go to combat until age 21. John McCardell, who founded and is now the director of an organization that exists to lower the drinking age back to eighteen, and also started the â€Å"Amethyst Initiative† talks about his solution to the problem. McCardell has credibility on this topic due to the fact that he is a former college professor and president, and is now a vice-chancellor at the University of the South, who has personally seen the way teenagers on a college campus drink and has an idea what will help with this issue. He says â€Å"Alcohol education is what we need.† This would make teenagers aware of the harms of drinking alcohol and reduce the amount of binge drinking that goes on. Lowering the drinking age would teach teenagers moderation. If they are drinking in a controlled setting where they are allowed to drink and don’t have to hide it, they will be more likely to casually drink. McCardell says that the 1984 Minimum Legal Drinking Age law was â€Å"an abysmal failure; it hasnt reduced or eliminated drinking, it simply driven it underground, behind closed doors, into the most risky and least manageable of settings.† In the â€Å"60 minutes† interview with CBS, the Boulder, Colorado Chief of Police, Mark Beckner is also an advocate for lowering the drinking age to eighteen. He says that â€Å"we cant stop it. The best we can do is try to contain it.† According to the 2010 National Survey on Drug use and Health, driving under the influence of alcohol was associated with age. The age group with the highest number of infractions(including wrecks) was the twenty-one to twenty-five year-old group at 23.4% of infractions being drunk/having been drinking as opposed to only 15.1% in the eighteen-twenty year-old group and a mere 5.8% in sixteen and seventeen year-olds. As far as fatal crashes go, the highest percent of drunk drivers that were involved in a fatal car crash was the group of 21-24 year olds. 25-34 year olds came in at 30%, 35-44 at 24% and all fatal car crashes of individuals that were above age 44 and below age 21 was only 14%. Driving under the influence of alcohol was associated with age in 2010. The rate was highest among persons aged 21 to 25 (23.4 percent). An estimated 5.8 percent of 16 or 17 year olds and 15.1 percent of 18 to 20 year olds reported driving under the influence of alcohol in the past year. Beyond age 25, these rates showed a general decline with increasing age. Many other western have long had a much more lenient attitude toward alcohol and alcoholic beverages. Many have set their Minimum Legal Drinking Age at 18, some at 16 and some do not even have a Minimum Legal Drinking Age. In many countries, such as Germany, there are very few drunk driving incidents whatsoever. In these countries parents often consume alcoholic beverages with their children, including beer or wine(in countries like France). By the time Europeans are allowed to drive they have been educated on the effects of alcohol and have been consuming alcohol for several years. Safe alcohol consumption should the same way as safe sex practices and drivers education classes. No one us naà ¯ve enough to think that teenagers will practice abstinence to avoid sexual encounters only in order to avoid a sexually transmitted disease, so why are people foolish enough to believe that teens will avoid alcohol just due to its dangers? Lowering the Minimum Legal Drinking Age will cause the teens who drink to rebel against their authorities to not drink as much due to it not being rebellious. Until a solution is agreed upon about whether the drinking age should be lowered, or stay at the age of 21, this will remain a controversial topic. Using these strategies in this essay works well to effectively persuade every single viewer that underage drinking is in fact a problem, and is attributed to the current law not allowing people to buy or consume alcohol under the age of 21. Because of the problems that are created because of this current law, it would be in this countrys best interest to lower the drinking age. This would prevent an increased number of alcohol related deaths due to underage binge drinking in the future. These are just a few of the reasons that the Minimum Legal Drinking Age act of 1984 should be repealed and the Minimum Legal Drinking Age should be at age 18. Works Cited Chafetz, Morris E. â€Å"The 21-Year-Old Drinking Age: I Voted For It; It Doesn’t Work.† Good Reasons With Contemporary Arguments. Eds. Lester Faigley and Jack Selzer. Boston: Longman, 2012. 554-555. Print McCardell, John. â€Å"A Drinking Age of 21 Doesn’t Work.† Good Reasons With Contemporary Arguments. Eds. Lester Faigley and Jack Selzer. Boston: Longman, 2012. 550-553. Print. â€Å"Issue in Focus: Drinking on College Campuses.† Good Reasons With Contemporary Arguments. Eds. Lester Faigley and Jack Selzer. Boston: Longman, 2012. 548-550. Print. CBSNews. (2010, March 01). The debate on lowering the drinking age. Retrieved from http://www.cbsnews.com/2100-18560_162-4813571.html-

Symptoms and Treatment of Parkinsons Disease

Symptoms and Treatment of Parkinsons Disease Parkinson’s disease Parkinson’s disease is a progressive neurologic disorder affecting the brain centers that are responsible for control and regulation of movement. It is characterized by bradykinesia (slowness of movement), tremor, and muscle stiffness or rigidity (Katzung, Mastes, Trevor, 2012). The major lesion appears to result in a loss of pigmented neurons, particularly those in the substantia nigra of the brain. The substantia nigra is a collection of midbrain nuclei that project fibers to the corpus striatum. One of the major neurotransmitters in this area of the brain, and in other parts of the central nervous system, is dopamine, which has an important inhibiting function in the central control of movement (Brunton, Chabner, Knollman, 2011). Although dopamine normally exists in high concentration in certain parts of the brain, in Parkinson’s disease it is depleted in the substania nigra and the corpus striatum. Depletion of dopamine levels in the basal ganglia is associated with bradykinesia, rigidity, and tremors (Brunton, Chabner, Knollman, 2011). Regional cerebral blood flow is reduced in patients with Parkinson’s disease, and there is a high prevalence of dementia. Biochemical and pathologic data suggest that demented patients with Parkinson’s disease may have coexistent Alzheimer’s disease (Connelly Fox, 2012). In the majority of patients, the cause of the disease is unknown. Arteriosclerotic Parkinsonism is seen more frequently in older age groups. It may follow encephalitis, poisoning, or toxicity (manganese, carbon monoxide), or hypoxia, or may be drug induced. The disease most frequently attacks persons in their fifties and sixties and is the second most common neurologic disorder of the elderly (Brunton, Chabner, Knollman, 2011). The clinical manifestations of Parkinson’s disease are impaired movement, muscle rigidity, tremor, muscle weakness, and loss of postural reflexes. Early signs include a stiffening of the extremities and a wax-like rigidity in the performance of all movements. The patient has difficulty in initiating, maintaining, and performing motor activities, and experiences some delay in carrying out normal activity (Kofman). As the disease progresses, the tremor begins, frequently in one hand and arm, then the other, and later in the head, although the tremor may remain unilateral. The tremor is characteristic: it is a slow, turning motion (pronation-supination) of the forearm and the hand, and motion of the thumb against the fingers as if rolling a pill between the fingers. It increases when the patient is concentrating or feels anxious (Connelly Fox, 2012). Other characteristics of the disease affect the face, stature, and gait. There is loss of normal arm swing. Eventually, the rigid extremities become weaker. Since there is limited movement in the muscles, the face has so little expression that it is said to be masklike (with infrequency of blinking), a feature that can be recognized at a glance (Connelly Fox, 2012). There is a loss of postural reflexes, and the patient stands with head bent forward and walks as if in danger of falling forward. Difficulty in pivoting and loss of balance may lead to frequent falls (Katzung, Mastes, Trevor, 2012). Frequently, these patients show signs of depression, and it has not been established whether the depression is a reaction to the disorder or related to a biochemical abnormality. Mental manifestations may appear in the form of cognitive, perceptual, and memory deficits. A number of psychiatric manifestations (personality changes, psychosis, dementia, confusion) are particularly common among the elderly (Kofman). Complications from immobility (pneumonia, urinary tract infection) and the consequences of falls and accidents are major causes of death (Kofman). Early diagnosis of Parkinson’s disease can be difficult, as the patient can rarely pinpoint when symptoms started. Often someone close to the patient notices a change such as stooped posture, stiff arm, a slight limp, or tremor. Handwriting changes may be an early diagnostic clue. The diagnosis of Parkinson’s disease can usually be made with certainty when there is evidence of tremor, rigidity, and bradykinesia (Brunton, Chabner, Knollman, 2011). The results of the patient’s history and neurological examination are carefully evaluated. Without treatment Parkinson’s disease progresses over ten to fifteen years to a rigid, akinetic state in which patients are incapable of caring for themselves (Brunton, Chabner, Knollman, 2011). The availability of effective pharmacological treatment has altered the prognosis of Parkinson’s disease; in most cases, functional mobility can be maintained for many years. Life expectancy of adequately treated patients is increased substantially (Brunton, Chabner, Knollman, 2011). The presence of dysphagia is associated with shorter survival times. Motor impairment of the muscles in the throat impairs swallowing and poses a risk for aspiration pneumonia. Other complications of Parkinson’s disease include sleep disorders, sexual dysfunction, bowel and bladder complications, and sensory problems, such as the loss of smell (Kofman). There is no cure for Parkinson’s disease. Treatment mainly relies on replacing dopamine with focus on controlling symptoms and improving quality of life (Katzung, Mastes, Trevor, 2012). Because Parkinson’s disease symptoms are due to a deficiency of the brain chemical dopamine, the brain drug treatment help increase dopamine levels in the brain. Levodopa, usually in combination with carbidopa, is the standard drug treatment (Katzung, Mastes, Trevor, 2012). For patients who do not respond to levodopa, dopamine agonists may be prescribed. Physical therapy is an important part of Parkinson’s disease treatment. Rehabilitation can help improve balance, mobility, speech and functional abilities. No treatment method has been proven to change the course of the disease. For early disease, with little or no impairment, drug therapy may not be necessary (Kofman). There is no cure for Parkinson’s disease, but medications, physical therapy, and surgical interventions can help control symptoms and improve the quality of life (Connelly Fox, 2012). The goals of treatment are to relieve disabilities and balance the problems of the disease with the side effects of the medications. A number of issues must be considered in choosing a medication for treatment. These include the effectiveness of the medication, the side effects of the medication, and the loss of effectiveness over time (Brunton, Chabner, Knollman, 2011). Levodopa (L-dopa) has been used for years and is the gold standard for treatment. L-dopa increases brain levels of dopamine. It is probably the most effective drug for controlling symptoms and is used in all phases of the disease. The standard preparations, Sinemet and Atamet, combine levodopa with carbidopa, a drug that slows the breakdown of levodopa. Levodopa is better at improving motor problems than dopamine agonists but increases the risk of involuntary movements. Effectiveness tends to decrease after four to five years of use (Brunton, Chabner, Knollman, 2011). Dopamine agonists’ drugs mimic dopamine to stimulate the dopamine system in the brain. The drugs included are pramipexole (Mirapex), ropinirole (Requip), bromocriptine (Parlodel), and rotigotine (Neupro) (Katzung, Mastes, Trevor, 2012). Monoamine oxidase B inhibitors may have some mild benefits in initial therapy; they include selegiline (Eldepryl) and rasagiline (Azilect), and they slow the breakdown of dopamine that occurs naturally in the brain and dopamine produced by levodopa (Katzung, Mastes, Trevor, 2012). Entacapone (comtan) is a catechol-o-methyl transferase (COMT) inhibitor that helps to prolong the effects of levodopa by blocking an enzyme that breaks down dopamine (Brunton, Chabner, Knollman, 2011). Medications to treat other symptoms associated with Parkinson’s disease include antidepressants. Tricyclic’s, particularly Amitriptyline (Elavil), studies indicate that the use of SSRIs may worsen symptoms. Anti-psychotics include clozapine and quetiapine help with psychotic symptoms seen with Parkinson’s disease (Brunton, Chabner, Knollman, 2011). The cholinesterase inhibitor drugs donepezil (Aricept) and rivastigmine (Exelon) are used to treat Alzheimer’s disease and are sometimes used for Parkinson’s disease. The benefits are small and may not be noticed. Daytime sleepiness and fatigue may be treated with modafinil (Provigil) a drug used to treat narcolepsy or methylphenidate (Ritalin) may be considered for fatigue. Glycopyrrolate, scopolamine, and injections of botulinum toxin may be used to relieve drooling symptoms (Brunton, Chabner, Knollman, 2011). Advanced Parkinson’s disease poses challenges for the patient and caregivers. Eventually, symptoms such as stooped posture, freezing, and speech difficulties may no longer respond to drug therapy. Surgery (deep brain stimulation) may be considered. Patients become increasingly dependent on others for care and require assistance with daily tasks. The goal of treatment for advanced Parkinson’s disease should be on providing safety, comfort, and quality of life (Brunton, Chabner, Knollman, 2011). The toxic effects of Levodopa with carbidopa are considerable. Dyskinesia, the ability to control muscles, can take many forms, most often uncontrolled flailing of the arms and legs or chorea, rapid and repetitive motions that can affect the limbs, face, tongue, mouth, and neck (Brunton, Chabner, Knollman, 2011). Hypotension is a common problem during the first few weeks of therapy. Cardiac arrhythmias and gastrointestinal difficulties are common, with the potential of gastric bleeding. Levodopa can cause disturbances in breathing function, but may benefit patients with upper airway obstructions. Hair loss and mental and psychiatric side effects including confusion, extreme emotional states, especially anxiety, vivid dreams, visual and auditory hallucinations, sleepiness, and effects on learning are other side effects of levodopa (Connelly Fox, 2012). Levodopa causes fewer psychiatric side effects than other drugs including anticholinergics, selegiline, amantadine, and dopamine ago nists. Psychiatric side effects often occur at night, therefore, some doctors recommend reducing the evening dose (Connelly Fox, 2012). Monoamine Oxidase B (MAO-B) inhibitors block monoamine oxidase B, an enzyme that degrades dopamine. Selegiline was commonly used in early onset disease in combination with L-dopa for maintenance (Brunton, Chabner, Knollman, 2011). Concerns of the significant side effects have been raised. Azilect, a newer MAO-B Inhibitor, is used alone during early stage Parkinson’s disease and in combination with L-dopa for moderate to advanced Parkinson’s disease. Side effects of MAO-B inhibitors include orthostatic hypotension, hypertension if combined with drugs that increase serotonin levels, such as many antidepressants (Brunton, Chabner, Knollman, 2011). A dangerous increase in blood pressure may occur if patients eat foods rich in the amino acid tyramine, while taking selegiline or rasagiline, and for two weeks after stopping the medications. Patients should avoid foods such as aged cheeses, processed lunch meats, pickled herring, yeast extracts, aged red wine, draft beers, sa uerkraut, and soy sauce (Connelly Fox, 2012). Dopamine agonists stimulate dopamine receptors in the substantia nigra. Dopamine agonists are effective in delaying motor complications during the first years of treatment (Katzung, Mastes, Trevor, 2012). Newer dopamine agonists, Mirapex (pramipexole) and Requip (ropinirol) are the most commonly prescribed. Mirapex appears to work better and have fewer side effects than requip. Side effects include nausea, vomiting, constipation, headache, nasal congestion, nightmares, hallucinations, and psychosis. Bromocriptine is the only ergot dopamine agonist approved for treatment in the US (Connelly Fox, 2012). Apomorphine is a dopamine agonist used as a rescue drug in people having on-off effects severe enough to require going off L-dopa for a few days. Because it causes severe nausea and vomiting, it must be taken with an anti-emetic. Rotigotine (Neupro) is a once daily transdermal patch to treat early and advanced stage Parkinson’s disease (Connelly Fox, 2012). Catechol-O- Methyl Transferase Inhibitors (COMT Inhibitors) increase concentrations of existing dopamine in the brain. Entacapone (Comtan, Stalevo) is the current standard COMT inhibitor. It improves motor fluctuations related to weaning off effects. The side effects include involuntary muscle movement, confusion, hallucinations, nausea, vomiting, insomnia, headache, urinary retention, cramps, diarrhea, less common constipation, susceptibility to respiratory infection, sweating and dry mouth (Brunton, Chabner, Knollman, 2011). A major concern is reports of death from liver damage in patients taking tolcapone (Tasmar) and is recommended only for patients unable to tolerate other drugs. Entacapone does not appear to have the same effects on the liver and does not require the same monitoring (Katzung, Mastes, Trevor, 2012). Anticholinergic drugs were the first used in the treatment for Parkinson’s disease. They are used only for control of tremors in early stages (Brunton, Chabner, Knollman, 2011). Side effects are dry mouth, nausea, urinary retention, blurred vision, and constipation. They can increase heart rate and constipation. They may cause mental problems including memory loss, confusion, and hallucinations (Brunton, Chabner, Knollman, 2011). Amantadine stimulates the release of dopamine and may be used with early mild symptoms. Side effects include swollen ankles, and mottled skin, visual hallucinations. Overdose can cause serious and life-threatening toxicity (Brunton, Chabner, Knollman, 2011). References Brunton, L., Chabner, B., Knollman, B. (2011). Goodman Gilmans: The pharmacological basis of therapeutics (12 ed.). McGraw-Hill. Connelly, B., Fox, S. (2012, December). Drug treatments for the neuropsychiatric complications of Parkinsons disease. Retrieved from Medscape.com: http://www.medscape.com/viewarticles/777166 Katzung, B., Mastes, S., Trevor, A. (2012). Basic clinical pharmacology (12 ed.). McGraw-Hill. Kofman, O. (n.d.). Complications of therapy in Parkinsons disease. CKP-MFC, 12, 87-91. Retrieved from http://www.ncbi.nih.gov/pmc/articles/pmc2153537

The Hobbit by JRR Tolkein :: essays research papers

â€Å"The Hobbit† Book Report   Ã‚  Ã‚  Ã‚  Ã‚   â€Å"The Hobbit† was written by J. R. R. Tolkien and secured as a copyright in 1937. The story is about a short, peaceful creature named Bilbo Baggins who, like most hobbits, is about half as tall as a human, but not nearly as loud. Bilbo resides in his comfortable hole where he leads a very easy-going life. He does, however have a side to himself that wants to go out and explore the world and be adventurous. One day a wizard, named Gandalf, comes to Bilbo’s house and discovers that he could use an adventure to make a difference in his life. Bilbo declines Gandalf’s invitation, but gets dragged into an expedition when Gandalf hires Bilbo as a â€Å"Burglar† to join a group of dwarves. These dwarves, led by Thorin, are going to head to the Lonely Mountain to reclaim treasure stolen from their family by a fierce dragon, named Smaug. Throughout the quest, the party is faced with trouble from trolls, goblins, spiders, and many â€Å"evil† creatures. Bi lbo is useful to the group because he can sneak around very quietly, and explore things without getting caught. This ability to sneak around is ever increased when he stumbles across a magic ring that makes him invisible. Using the ring, Bilbo comes across a way to kill the dragon and reclaim the treasure. He spreads word of Smaug’s weak spot and the dragon is killed, but not before an entire town is destroyed. When the treasure is reclaimed, there is much controversy over who gets to claim it. Thorin is, however, unwilling to share the treasure with anyone but the dwarves, and a war brews over it. The â€Å"good† creatures unite and defeat the â€Å"evil† creatures, but as a consequence Thorin is killed in battle. The treasure is then spread peacefully among the â€Å"good† creatures, including Bilbo, and he heads home. When he returns he finds that the other hobbits do no longer wish to interact with Bilbo because of his newfound adventurous ways. He do esn’t mind though, because he has gained many friends out of his expedition, who stop by frequently. The Hobbit is a great story for people who like to leave their present reality, and simply enter a world of fantasy. This novel’s most important element was the main character, Bilbo Baggins. The entire story revolves around Bilbo’s actions, and follows him wherever he goes.

Journal Reading :: essays research papers

Introduction: Journaling is a powerful thing; there are many different uses for a Journal, everything from personal thoughts to keeping an expedition written down for later resource. Many people don’t use Journals which is unfortunate, my focus in this paper is to show the different areas of Journaling and to possibly make it a part of your life. Thesis: My thesis statement is to show the importance of journaling in leadership and other positions.   Ã‚  Ã‚  Ã‚  Ã‚  Getting started, it doesn’t take much to get started, all you need is a pen or pencil, preferably a pencil incase you need to change something, but a wise teacher once told me that his mom asked him a very interesting question, â€Å" What do you use on crossword puzzles, a pen or a pencil,† she then later stated â€Å" I always do mine in pen,† now the reason behind her always doing it in pen is so you know you did it write the first time, and you feel confident in that. The next thing you would or should need is something to write on, this can be anything from a purchased store journal to napkin from a restaurant, although having a booklet of napkins may seem absurd, it doesn’t matter as long as it’s something to take your thoughts down on. The other thing that you should have is a positive attitude, trust me it is helpful in all aspects of life, a great man once said, â€Å" The greatest discovery of my generation is that hum an being can alter their lives by altering their attitude of mind by William James.† (Pg.88 John Maxwell The 21 Indispensable Qualities of a leader). That’s about all it should take to start a effective journal, so stay focused as we will be going through the Purpose of Journaling. The first area I would like to delve into is the thinking aspect of Journaling. I don’t know about you, but I like to think, it makes me feel like I’m the smartest man in the world. I took this class called Practicum Seminar Leadership and for the class we had to go on a solo trip for about 3 days, by ourselves, and I thought a lot while I was out there and I wish I had, had a journal to keep all my thoughts down in, because some of them were lost, but I came out of there with a deep understanding of what it means to be positive.

Impact of Terrorism on Financial Markets of Pakistan Essay

Since the emergence of 9/11 event in U.S.A., the world has witnessed significant increase in terrorist activities. Pakistan unfortunately has been the most vulnerable to the paradigm shift of terrorism. Its vulnerability is mainly subjected to its geographical location. Nonstop terrorist activities toppled over the country’s political, social and economic structure. Now the life of a normal citizen is at risk. State of infrastructure has become deplorable owing to the series of terrorist activities. Resultantly economic activity reduced manifold. Being a frontline state on â€Å"war on terror† the loss of Pakistan’s economy was a natural consequence. Pakistan’s economy was affected almost at all economic fronts which comprises of external, industrial, agricultural, business and services sector, etc. The continued rise in the terrorist activities also affected the confidence of foreign investors which caused the stoppage of FDI, besides withdrawal of the po rtfolio investment. The impact of terrorism was also felt in all the areas of the economy with varying degree and intensity. The most prominent areas included tourism, hotelling, manufacturing, cottage industry, transportation, trade, etc. These industries have reinforcing effect on each other. Factors such as heavy influx of Afghan immigrants, particularly Taliban; porous Pak-Afghan border; political instability; external conspiracies, demographic weaknesses and its geographical attractiveness have accentuated the process of Terrorism in Pakistan. All these factors combined with global â€Å"war on terror† have deteriorated Pakistan’s economic situation as a whole. Financial markets, which are the nucleus of any economic system, are also supposed to be affected due to terrorist activities. In the aftermath of the terror attacks of 11 September 2001 in New York and 11 March 2004 investors’ confidence deteriorated beyond national boundaries because of contagion effects (Johnston and Nedelescu, 2006). Under the current wave of terrorism in Pakistan, particularly the stock market, forex m arket and money markets are affected the most. These markets are highly important as most of the policy impacts are transmitted through these markets. Therefore, any disruption in the smooth working of these markets may affect the achievement of overall economic target set by the government. Especially the stock market, which is considered to be the barometer of economic health of a country, appeared to have been affected by the rise in extremism or terrorism in recent times. The negative impact of the market to hype in such activities is reflected by the selling of bonds of the target firm’s, but the magnitude and consistency of the negativity stirred in the market and of the spill over effects is questionable (Karolyi, 2006). Similarly, the forex market which is also obviously affected by the uncertainty prevailing in the economic environment bears adverse effects of the related events. As regard the banking sector of Pakistan, it is also found to be inflicted due to the aftermath of the terrorist activities. The size and distribution of the effect of these activities would depend on the myriad of factors such as nature of terrorist attack, target of the attack, the multiplier effect, policy response and the resilience of the financial market (Bruck and Wickstrom, 2004). Besides Lal Masjid operation, the hall mark of the terrorist activities over the sample period is loss of internationally known Pakistani Political personality i.e. Benazir Bhutto. After the assassination of the said Pakistan’s banking sector faced substantial losses due to damage to the infrastructure and robberies of the bank. Downfall of any of the financial market associated with a terrorist activity reduces the incentive to spend as opposed to save, a process that can spread through the economy and the rest of the world through normal business cycle and trade channels (Johnston and Nedelescu, 2006). Keeping in view the significance of financial market for Pakistan’s economy, the quantification of the impact of terrorists’ activities on financial market becomes an interesting area of research work. Especially, this requires empirical quantification of the impact of various kinds of terrorist activities that either occurred in key business centers or happened in the far flung areas. II. Literature Review We find very limited literature on the subject issue. Although a few studies are found to be discussing the overall consequences of terrorism on world economies, we do not find much evidence about the quantification of the impact of terrorist activities on financial markets using such high frequency data and with special reference to Pakistan. For the benefit of readers, the review of some of the relevant studies has been made which is given as under: After the eruption of terrorism in Spain in the 1970’s, Abadie and Gardeazabal (2001) discovered the fact that there was ten percent deterioration in the per capita GDP of the Basque region as opposed to a synthetic control region. They also found out that this difference widened due to the rise in the terrorist activities. Chen and Siems (2004) assessed the degree to which the U.S. Stock market reacted to fourteen extremist acts in the past ninety years by using the event study methodology. They also tried to assess the impact o f the September 11 attacks and the raid on Kuwait by Iraq on the stock markets of different nations of the world. They found certain proof of flexibility in the fact that the encounter with such extremists’ lead to a decrease in the market reaction. Moreover, they came to know that the impact of the September 11 incidence and the Iraqi raid were more unfavorable and harmful on the stock markets of nations around the world as opposed to the U.S. stock markets. The study by Johnston, et al. (2005) attempted to explore the impact of terrorism on financial markets. They found that how financial markets react to different shocks stemming from terrorist attacks. By making use of the data on financial markets such as the government securities market, the repo market, the insurance industry and the capital market of U.S, the study analyzed the reaction of the financial markets to the September 11 ‘2001 terrorist attacks in the New York, and March 11, 2004 attacks in Madrid. They concluded that given the accurate timely response of the authorities and rogue disaster management, the financial markets of U.S and Spain respectively were attributed with diversity and resilience to absorb the shocks of terrorist attacks. Both the central banks laden with the sense of responsibility of the â€Å"lender of the last resort† also came to rescue their respective financial systems in the aftermath of these acts of terrorism. In addition, the globalization trends also incepted the cross border cooperation among the central banks which mitigated the diffusion of contagion effects through the chain process of business cycle. Barth, and et al (2006) used panel data on terrorism and employed some of the control variables which proved the negative, depressing and unfavorable influence of terrorism on economic progress. In broad-spectrum, these extremists’ occurrences and events have a substantial destructive impact on the economy of a country and thus rende r a depreciation and deterioration of the economy. Their outcome also sheds some light on the fact that the aim of such attacks also makes a difference. Extremists’ attacks directed at places and properties other than that of public have an unconstructive link commonly with development and capital structure and generation. Gulley and Jahangir (2006) used the statistical data available for the stock, bond and foreign exchange rate and stock market from 1968 to July 2005, for a group of countries i.e Australia, Canada, France, Germany, Italy, Japan, UK and the US. Data on terrorist attacks has been collected from The National Memorial Institute for Prevention of Terrorism (MIPT) for exactly the same time period characterizing the date, time, location, type and target of the attack. Since the data is high frequency data, they have employed â€Å"Generalised Autoregressive Conditional Heteroscadastisity (GARCH) Model† to study the impact of terror attacks on the return (level) and volatility of the financial markets of the sample area, while their theoretical model is based on asset pricing model. Their results are well collaborated with the perceived expectations and the theory. They found negative returns with increasing terrorist activities for the stock market, while for the bond market lower yields were observed. Terrorist attacks had not been found associated with additional volatility in stock market in the given set of countries under observation. Liquidity of the foreign exchange market is significantly higher than other markets. Abadie and Gardeazabal (2007) attempt to measure the impact of terrorism on the foreign direct investment in an open economy. They made use of the data set on net stock of FDI obtained from the UNCTAD (United Nation Conference on Trade and Development) for 98 countries and GTI (Global Terrorism Index) for measuring data on terror activities which have the 100 European Journal of Social Sciences – Volume 18, Number 1 (2010) advantage over other measures by being popular among the international investors’ who use it to evaluate specific country’s risk. During their regression analysis, keeping the other types of risks constant, it was concluded that small changes in terror activities have the potential to bring big change in the allocation of the productive resources across the countries, keeping the international economy sufficiently open. They have statistically proved that wit the increasing standard deviation of the terror attacks, the net FDI shrinks by 5 percent of GDP. Melnick and Eldor (2007) used discounted-cash-flow valuation model in order to calculate the media exposure created due to such terrorist acts and also for the assessment of costs in term of the foregone alternatives of the liberated and unbound media exposure provoked by such extremists’ acts and their impact on the single stock market fun ctioning in Israel, â€Å"Tel Aviv Stock Exchange†, to measure the influence on the economy. They reached to the conclusion that there a statistic importance and significance of the opportunity cost variable and that it provides a role as an adequate indicator including the whole content required to portray the impact of militant acts on the stock market. The outcome clearly shows the converse relationship between the degree of media exposure and the deterioration in the value of stocks. However, it was also found that not any of the elements arising out of terrorism are statistically substantial and significant after the insertion of the opportunity cost variable in the equation. Berrebi and Klor (2008) took the sample of 125 Israeli defense and security companies that are traded in American markets and a number of American companies as controls for Israeli companies. The data on terror attacks, collected from Israeli foreign ministry, was based on daily terror attacks and noncombatant fatalities arising from them. They made use of the event study methods in order to measure and assess the positive impact of terrorism on the return of the stocks of the sample companies relative to those of control group. It was empirically found that Israeli defense related companies experienced comparatively lowered (negative) abnormal returns than those of American controls during the first part of the period under analysis i.e. before Palestinian uprising (January 1st, 1998 – September 28th, 2000). They had also been successful in proving that average cumulative difference in abnormal returns (CDRAR) of the defense related companies exhibit downward slope before the Palestinian uprising where as the trends reverses abruptly during the second part of period under analysis (second Palestinian uprising). During the second uprising, the defense realted companies gained around 70 percentage points while the non defense companies lost over 60 percentage points. Out of the myriad of research problems pertaining to this area of interest, quantification of the terrorist activities and measuring its impact on the fluctuation of various economic variables is imperative owing to the possibility of plausible relationships between two variables which may result in biased empirical results (Berrebi and Klor, 2008). In this paper, this problem has been tried to sought out by using Durban Watson statistics in order to check the variables for autocorrelation issue. This study is different in several aspects from the existing studies which were conducted on the subject matter. Some of the distinguishing features are given as under: †¢ It uses daily data on all the financial markets and the terrorist activities. Earlier studies present on this topic have examined the financial markets on a much lower frequency data. †¢ This study is first of its kind with reference to Pakistan. No research has been done in Pakistan before on the same lines. †¢ Different aspects of terrorism have been incorporated in this study in terms of the kind of terrorist activity, its intensity, the location of incidence and the target. †¢ The study examines the effect of each kind of terrorist activity on stock, forex and money markets separately. III. Research Methodology Data Description The study uses time series data for this piece of research work. It uses high frequency data, which is a daily data, over a period of two and a half years (i.e. from 31st December 2005 to 30th June 2008). The 101 European Journal of Social Sciences – Volume 18, Number 1 (2010) data has been collected from different resources. Secondary data has been used for three financial markets separately, i.e. banking market which represents the money market while stock market (KARACHI STOCK EXCHANGE) and the FOREX market represent the capital market. The data on the KSE Index has been taken from the KSE website. The data on the foreign exchange (i.e. rupee dollar parity) has been acquired from the Monetary Policy Department of the State Bank of Pakistan. The data on KIBOR (Karachi Inter Bank Offer Rate) has also been obtained from Domestic Markets & Monetary Management Department (DMMD), State Bank of Pakistan. The most cumbersome process of the primary data collection has been the collection of terrorists’ activities on daily basis. Daily information on these activities has been collected from various news papers including â€Å"The Daily Dawn†. Since various kinds of terrorists’ activities were found in the news papers, an attempt was made to choose the most relevant activities which has some impact on the working of financial market. While finding out the impact of terrorists’ activities on the financial markets of Pakistan we categorize the terrorists’ activities into four distinct dummy variables. The terrorists’ activities have been grouped together in four different categories naming D1, D2, D3 & D4. Each activity has been assigned a particular group according to its intensity. A brief discussion of dummy variables used in the study is given as under; †¢ D1 is equal to 1 for the kind of terrorists activities which have targeted the key p ersonnel (political or otherwise) of the country and 0 for not happening of such event. †¢ D2 is equal to 1 for the happenings of the terrorists’ activities in the cities that are financially active or are the economic centers of the country and 0 for not happening of such events. †¢ D3 is equal to 1 for occurrence of major activities but in the non financial cities, †¢ Whereas D4 equals 1 for minor terrorists’ events taking place in small cities and 0 for not happening of such events. †¢ DST is equal to 1 in case of any structural change that has taken place during the period under study, otherwise it is equal to 0. Though most of the activities placed in D4 are not minor in terms of cost of human lives and infrastructure of the cities, but may be because of the peaking magnitude of the terrorism in the country for the past two and a half years or so, we as a nation, has become so much resilient to such attacks that loss of lives of normal citizens or human beings or blowing up of country’s resources does not mean much loss to u s, neither in moral sense nor in financial terms. Analytical Techniques For the estimation of results, E-views, which is time series econometric software, has been extensively used. For the purpose of analysis, the model used is â€Å"MULTIPLE REGRESSION MODEL†. This model not only tells us the extent of the impact of terrorists’ activities on the individual financial markets but it also tells us the direction of the relationship between the regressors and the regressands. In this study the regressand are KSEI, FOREX rate and KIBOR while the four categories of terrorist activities are regressors. The study asseses the impact of terrorist activities on these three market. The functional form of the model would be as follows; (1) FM = f (Di) Where; FM indicates any type of the above mentioned financial market. Di indicates dummy variable capturing the impact of any type of the terrorist activity which affects the financial markets in Pakistan. To assess the impact, the functional form of the equation no. 1 is converted i nto mathematical equation, which is as follows; FM = ÃŽ ± + ÃŽ ²Di (2) Where; FM = any financial market operating in Pakistan e.g. ÃŽ ± = intercept ÃŽ ² = parameter to be estimated or coefficient. Di = dummy variables ranging from D1 to D4. WhileD1, D2, D3 and D4 are already explained. For KIBOR analysis, the study uses an additional dummy variable namely DST. It denotes any structural changes occurring in the economy which has imminent impact on the inter bank market. Since the dependent variable (financial markets) is also affected by many other variables which are called stochastic or error terms, so we need to convert the equation no. (2) into an econometric equation, which is represented as follows; FM = ÃŽ ± + ÃŽ ²Di + ei (3) Where ei is an error term. Since the dynamics of each kind of financial markets are a bit different. We need to estimate the results separately using a different equation for estimation purpose. These are given below; i. Stock Market Since KSE is the most active or most efficient of all the financial markets in Pakistan, we analyze the impact of four dummy variables on KSE 100 index first. In order to particularly analyze the growth of KSE Index we convert the daily values of KSE 100 Index into their log values. As the stock market show significant volatility over the last few years, we take natural log of the equation no. (2) for smoothening of the KSE Index. KSEI = ÃŽ ± + ÃŽ ²Di + ei (4) Taking natural log on the left hand side we get; Ln(KSEI) = ÃŽ ± + ÃŽ ²Di + ei (5) This is the final equation which can now be used for estimation of the impact analysis of terrorist activities on KSE. The equation reads as the natural log of Karachi Stock Exchange 100 Index is a function of the Di viz D1, D2, D3 and D4 representing various forms and intensity levels of terrorist activities. After regressing all the dummy variables (D1 to D4) separately on the LnKSEI, we see adverse effect of D1, D2 and D4 on the LnKSEI. It is important to note that the individual effect of D1 and D2 seemed suppressed. So in order to enhance the collective effect of D1 and D2 we combine both the variables and name it as D1†². So that the terrorists’ activities targeting key personnel and major financial areas are singularly termed as â€Å"major events† (grouped in D1†²) while D3 and D4 remain the same. By applying OLS regression technique, we estimate the following equation;(6) Ln(KSEI) = a + ÃŽ ²D1†² + ÃŽ ³D4 + ei Where; Ln(KSEI) = natural log Karachi Stock Exchange Index. D1†² = terrorists’ activities targeting key personnel and major financial cities. D4 = minor activities in small cities. ÃŽ ±, ÃŽ ², ÃŽ ³ = parameters to be estimated. ei = stochastic/ error/residual term. ii. FOREX Market Foreign exchange market of a nation is the arena where country’s currency is traded for other currencies. The daily buying and selling of a currency determines the daily average rate of a currency. The trading takes place in domestic and international market simultaneously and hence the equilibrium point of the demand and supply of a currency determines the daily average FOREX rate. The rate can be determined in terms of any foreign currency. The exchange of currency typically takes place via brokers, but overall many institutions like commercial banks, investment banks, brokerage houses, clearance houses, foreign exchange markets on the whole and individuals are involved in the process. FOREX market is the biggest financial market of the world but with reference to Pakistan it stands second. Since foreign exchange rate can be expressed i n two ways, i.e;  i. Direct quotation ii. Indirect quotation. In this study we have used the direct quotation of the Pak rupee (PKR). We take the exchange rate of PKR in terms of U.S Dollar and express the exchange rate as I/PKR (direct quotation). Taking its natural log reduces the volatility of the exchange rate. In our analysis we are required to determine the impact of terrorists’ activities on the Exchange Rate stability or to critically see how much of the underlined activities depreciate the domestic currency in terms of the foreign currency (U.S. Dollar). We have derived the following equation: Ln (ER) = ÃŽ ± + ÃŽ ²Di + ei (7) Where; ER = exchange rate. While for analysis purpose we use the following equation. (8) Ln (ER) = ÃŽ ± + ÃŽ ²1(D1) + ÃŽ ²2(D2) + ÃŽ ³(D4) + ei where; Ln (ER) = natural log of exchange rate D1 = terrorists’ activities targeting the key personalities D2 = terrorists’ activities taking place in the major financial cities D4 = minor terror events in small cities. ÃŽ ±, ÃŽ ², ÃŽ ³ = parameters to be estimated ei = residual/ error term. It is clear from equation (8) that ER is influenced by the terrorist activities grouped in D1, and D2. For the empirical findings, we regress the g iven econometric equation by applying OLS technique. iii. KIBOR Karachi Inter Bank Offer Rate (KIBOR) is the average of daily offer rates of commercial banks. It is the average daily rate on which a bank offers short term loans to other commercial banks. In other words, KIBOR is a yardstick to measure the capability of banking industry of a country to accommodate short term loans and funds. The underlined activities may also affect KIBOR rates. Interbank rate is the relative indicator of performance and efficiency of banking industry since it indicates the borrowing ability of the commercial banks. Econometric equation for KIBOR is given as; KIBOR = ÃŽ ± + ÃŽ ²Di + ei (9) To find out the empirical results of impact of terrorism on banking industry (KIBOR) weestimate the following econometric equation by OLS technique. KIBOR = ÃŽ ± + ÃŽ ²D1 + ÃŽ ³DST + ei (10) Where; KIBOR = Karachi Inter Bank Offer Rate D1 = major terrorists’ activities targeting key personalities. DST = dummy variable for structural changes. ÃŽ ±, ÃŽ ², ÃŽ ³ = parameters to be estimated ei = stochastic/error/residual term. IV. Empirical Findings As already explained, we separately estimate the impact of terrorists’ activities on three types of financial markets mainly due to having different dynamics and sensitivity of events. The final impact analysis is given as under; i. KSEI Using equation no. (6) we obtain the impact of underlining activities on KSE market. 104 European Journal of Social Sciences – Volume 18, Number 1 (2010) It is apparent from the results that the value of R2 is 0.98 or 98% which means that our model is best fitted. It implies that 98% of variations in the dependant variable (LnKSEI) are explained by the independent variable. Durbin Watson Statistics is equal to 1.96, which is closer to 2, shows that the regression model is not ploughed with the problem of autocorrelation. Standard error of the model is also reasonably small (0.016336) which is responsible for increasing the calculated value of t-statistics, thus we reject null hypothesis (i.e. Ho: ÃŽ ² & ÃŽ ³ = 0). F-statistics is 14379.05, which is comparatively very high indicating the overall significance/fitness of the model. C or ÃŽ ± is actually the intercept which is the weighted average of all the ignored variables that might affect the KSE index. Its value is 9.441305 which are significant at 1 % level of significance (highly significant). This indicates that KSEI is affected by variety of events not included in this analysis due to time constraint factor. Most probably the factors like capital taxes on earnings of stocks, capital inflows, and future strategies of companies registered at stock market, external shocks might be included in the test. Similarly, the terrorist activities also adversely affect KSE. Particularly, the value of D1 dummy variable (ÃŽ ² = -0.005021 at 2% level of significance) indicates that 1 percent increase in relevant terrorists’ activities might negatively affect KSE 100 Index by 0.5 percent. It means that the terrorists’ activities occurring in major financial hubs and those targeting key personalities of the country negatively and significantly impacts the performance of the KSE. To put it the other way round, KSE 100 Index might decline when any such terrorist activity occurs in the region. In the same way, the dummy variable D4 has also affected the KSE 100 Index negatively . It indicates that minor terrorist attacks occurring in small cities do not impact the KSE 100 Index significantly, although the impact in negative. Here, the estimated negative value of ÃŽ ³ (-0.000137) means to support the argument that small terrorist activities have negative impact on KSE. More appropriately, the said terrorist activities grouped in D4 combined with other residual factors also affect the functioning of the KSEI negatively. The impact of such activities on KSE performance may become significant because of the important paradigm shift in policy measures. Policies of the government or other concerned institutions are greatly affected by the magnitude of terrorism in a region. Greater the magnitude of the terrorist activities, greater would be the uncertainty in economic environment, and consequently greater would be the rate of change of policy measures. Since Karachi provides the centre of financial activities to the country and Karachi Stock Exchange is the biggest stock market of the country, so the vulnerability of the city to the terrorism is most likely to create volatility of the liquidity in the economy. Greater the occurrence of terrorist activities in the city, greater would be the likelihood of adverse effect on the financial markets, particularly KSE. Consequently the result would be the higher outflow of capital, lower investments, lesser exports and depletion of foreign reserves. ii. FOREX Rate Using the equation no.(8) the results of the impact of terrorist activities on FOREX market has been estimated by OLS technique. According to the results obtained, the value of the R2 is 0.99 or 99%, which implies that 99% of the variations in dependant variable (ER) are explained by the variations in explanatory variables. The value of R2 is pretty high indicating that the model is a best fit. Durbin Watson statistics is equal to 2 showing that there is no issue of autocorrelation in the regression model. The F- statistics value is also very high and significant showing the overall significance of the model. Standard error of the regression is very low, making t- statistics pretty high. The intercept term, C or ÃŽ ± is -4.078457 which is quite significant indicating that the ignored variables caused depreciation of Pak rupee against U.S. Dollar. As regards the impact of dummy variable D1, it is negative but insignificant. So we are able to interpret that the terrorist activities named as D1 do adversely affect the exchange rate of PKR but the impact is not at all significant. Similarly, the coefficient of D2 is also very small which indicates that the response of the FOREX market to underlying activities is almost negligible. It determines that D2 activities have a negative and insignificant impact on the determination of FOREX rate. The impact of D4 activities on FOREX is interpreted in the same way as that of D1 and D2. European Journal of Social Sciences – Volume 18, Number 1 (2010) From all of the above coefficient values we can infer a negative relationship between the terrorism and the FOREX rate. The negative sign indicates that any such happening is responsible for the depreciation of the domestic currency in terms of the foreign currency (U.S. Dollar in the present case). Though this impact is not significantly visible with reference to Pakistan but there might be several possible explanations for this suppressed relationship. From Pakistan’s standpoint the impact might be insignificant because of high resilience of the financial markets here. From the daily data of the terrorist activities it is evident that these events have been taking place at a very high frequency over the sample period. The magnitude of these activities ranges from mild offensive happenings to very high terror attempts that scare off the whole humanity. In this scenario, it is likely to expect the convergence of financial markets. The impact has to be adverse because such happenings produces uncertainty in the economic environment, increases the risks and liquidity shortage, reduces exports, depreciates currency, lowers the domestic and foreign investments and thus definitely there is a flight of capital from economy. But in case of Pakistan, high frequency of such events might be responsible for the cold blooded attitude of nation as a whole and these events may seem a routine happening to the people involved in currency trading or in any other financial market. It is because of this reason that the variation in depreciation of PKR is very less as compared to the perceived expectations. So we can safely say, terrorism does not signify its impact on foreign exchange market of Pakistan, unless the ev ent is highly adverse or of global attention like that of assassination of the former prime minister of Pakistan, Benazir Bhutto. iii. KIBOR By using OLS technique on equation no.(10) we get the following results on impact of terrorist activities on the money market or interbank market (KIBOR). The results showed us that the value of R2 is 0.98 or 98% which means that it is a best fitted model. 98% of the variations in the dependant variable, KIBOR, are determined by the variations in the explanatory (independent) variable. The estimated value of Durbin Watson Statistics is 1.95 which is used to indicate that the results are not ploughed with the menace of autocorrelation problem. This reflects the accuracy of results, as it can be used in the policy formulation process concerning the KIBOR. Standard Errors are very small which means higher values of t-statistics. Values of F-statistics are again very high i.e. 15109.34 showing the overall significance of the model. The value of intercept, C or ÃŽ ± is 8.474 is high, which is significant at 1% level of significance. It is indicative of the fact that other factors are more likely to be responsible for the increase in the bank rate. The value of the coefficient of D1 i.e ÃŽ ²1 is 0.001382. The terrorist activities grouped in D1 do affect the KIBOR positively but insignificantly. Positive sign indicates that greater the occurrence of the activities, higher will be the interbank rate. The coefficient of D2 is also positive (highly significant at 1 % level of significance). It indicates that factors other than terrorist activities play a key role in bringing about changes in the KIBOR rate. The impact of terrorist activities on KIBOR is widespread as compared to that of stock market (KSE). It is because of the fact that we find a bank branch network throughout the country, while KSE is confined to one city only. So the likelihood of the affect of terrorism increases on banking industry. The increased impact can be seen in the shape of the KIBOR rate. V. Conclusions and Recommendations This study was primarily aimed at estimating the impact of various kinds of terrorist activities on the three financial markets viz Karachi stock market, Foreign exchange market and the money market. The findings of the OLS regression model enable us to conclude; †¢ The economy of Pakistan has been adversely affected by the ongoing terrorist activities. †¢ The terrorists’ activities in Pakistan have adversely and significantly affected the performance of KSE. Further, the KSE has been relatively more affected by the terrorist events compared to  the other markets. This might be due to it’s vary nature as KSEI is relatively more sensitive to events rather than economic fundamentals. The terrorist activities have insignificant but adverse effect on FOREX market. One reason behind the insignificant impact of terrorist activities on FOREX rates might be the inter bank data used in the analysis. As the SBP continue to interfere in the FOREX market, therefore, any volatility arising due to such events might be subdued due to SBP proactive intervention. The impact on KIBOR rate although negative but estimated to be insignificant is a very positive development as KIBOR rate is considered as an indicator of short term loans extended by banks. In case of significant adverse impact of terrorist activities on KIBOR, it may affect investment plans of the country, which might have been negative implication for Pakistan’s economy. Most of the findings of this study are consistence with the theoretical expectations. The result estimates for the KSE 100 Index and KIBOR rate are per expectations. The econometric results for the second regression are although correctly directed but not consistent with the theory to extent as expected. The rising magnitude of terrorism in a country definitely adversely affects the economy in general and financial markets in particular. Last but not the least, targets of the terrorist activities play an important role in determining the impact on financial markets. There might be many shortcomings in the study which mainly accounts to the time constraints. light of the present study some policy recommendations could be made, following are some of †¢ In the light of the study, its empirica l findings and conclusions the government and the state ought to work on the institutional development on account of terrorism. Anti terrorism policy framework of international concern shall be formulated, enhanced and made available to the general public under this institution. Masses be given advanced warnings before occurring of any such event and rehabilitation be an important immediate step after the event has happened. Besides the well being of the general masses, effective contingency planning to mitigate the financial risk faced by the financial firms and the over all economy has to form a major constituent of the anti terrorism policy making institution. Since the adverse impact of terrorism on the financial markets has been econometrically proved in this study, economic policy should form an eminent part of the anti terrorism policy making. Effective measures shall be devised to counter the wave of disruption created in any of the above mentioned financial markets. With the continuous attacks of terror on the economy, as in Pakistan, the major domestic and international investor’s draw their money out of the financial markets. There is a flight of capital out of the economy which is a major set back to the domestic currency. To mitigate the risk of depreciation of the currency, policies regarding increasing the money supply and lowering the interest rates in order to perk up investor’s confidence and to keep the foreign reserves build up shall be enacted. Policy has to be formed to strengthen the financial structure of the economy and increase its resilience to absorb the shocks to the maximum limit. Opportunities to the domestic manufacturers’ shall be accentuated to increase exports and thus demand of domestic currency. This is an important measure to avoid the depreciation of currency and also it will make the trade deficit unlikely to occur. This is an important policy implication for the money market. Investment in research and development and innovative security measures is also need of the day. European Journal of Social Sciences – Volume 18, Number 1 (2010) Lastly, policies should be made and extended on the global level to increase the cooperation and coordination among the major stake holders in the global financial markets. Policies regarding benign relationships among the central banks of international importance shall also be encouraged so as to extend financial help during the crucial financial crunch after any enormous act of terrorism. Based on the results findings, the study mainly recommends that the concerned policy makers must take into account the impact of terrorist activities while formulating policies for the three kinds of financial markets. However, the impact of terrorist activities varies on each market in terms of its intensity, place of occurrence etc. †¢ References [1] [2] [3] [4] [5] [6] [7] Abadie, A. and Gardeazabal, J. (2001). The Economic Costs of Conflict; A Case-Control Study for the Basque Country. Research Working Paper No. 01/048. Harvard University. Faculty Research Working Paper Series. Retrieved from: http://papers.ssrn.com/abstract=293120 Abadie, A. and Gardeazabal, J. (2007). Terrorism and the World Economy. Available at: http://www.hks.harvard.edu/fs/aabadie/twe.pdf Barth, J.R., Li, T., McCarthy, D. (2006). Economic Impacts of Global Terrorism: From Munich to Bali. Capital studies, Milken Institute. Berrebi, C. and Klor, E. F. (2008). The impact of terrorism on defense industry. Working paper No. 597. RAND labor and population working paper series. Retrieved from: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=729006 Bruck, T. and Wickstrom, B. A. (2004). The economic consequences of terror: A Brief Survey. HiCN Working paper 03. Paper presented at Household in Conflict Network, University of Sussex, April 2004. Chen, A. H. and Siems T. F. (2004). Effects of terrorism on global capital markets. European journal of political economy. Vol. 20, pp: 349-346. Chesney, M., Reshetar, G. and Karaman, M. (2010). The Impact of Terrorism on Financial Markets: An Empirical Study. Retrieved from: http://www.google.com.pk/search?hl=en&q=The+Impact+of+Terrorism+on+Financial+Market s:+An+Empirical+Study&btnG=Search&aq=f&aqi Gujrati, D. N. (2004). Basic Econometrics. United States Military Academy, West Point, Mc Graw Hill Publications. Gulley, O. D. and Sultan, J. (2006). Risk Premium Volatility, and Terrorism: New Evidence. Milken Institute. Gupta, S., Clements, B., Bhattacharya, R., and Chakravarti, S. (2002). Fiscal Consequences of Armend Forces and Terrorism in Low and Middle-Income Countries. IMF Working Paper No: 02/142. International Monetary Fund ,Fiscal Affair Department. Glaeser, E. L. and Shapiro, J. M. (2001). Cities And Warfare: The Impact Of Terrorism On Urban Form. NBER Working Paper No: 8696. National Bureau of Economic Research. Jalalzai, M. K. (2002). The Holy Terror -Islam, Violence and

Digital Divide

Digital divide is defined as the distance between those with access to the internet and those without. Digital Divide is a problem that stretches to all corners of the world. It affects not only people here in the U. S. but also countries across the globe. Two questions have to be asked in all this. The first is â€Å"Does the Digital Divide really exist? † and the second is â€Å"What is the real impact of the Digital Divide? † The idea of Digital Divide did not come into play until the early 1990’s with the passage by then President Bill Clinton of the High Performance Computing Act.What this act did was to provide funding for a high speed fiber optic network which would go on to become the internet that we use today. This enabled home computers to become more useful which in turn caused the number of personal computers in the U. S to skyrocket to over ten million in a five year period. (Rapaport, 2009) In all this a new department in the Clinton Administration was formed, The National Telecommunications and Information Administration. The NTIA is the President’s main advisor on information and telecommunication and was co-founded by Albert Hammond, a White House aide. Rapaport, 2009) It was Hammond in addition to NTIA administrator Larry Irving that came up with the phrase â€Å"Digital Divide† This phrase eventually began to appear in then V. P Al Gore’s speeches. As time went on, computer and internet prices began to fall. With these falling prices came the idea that the Digital Divide was closing. The new presidential administration did not have as great an interest in digital access and eventually â€Å"Digital Divide† became â€Å"Digital Inclusion. † The NTIA was eventually downgraded and its budget taken away. These actions eventually and effectively ended the NTIAThe question of it the Digital Divide is real can be answered by looking at the numbers, A report done by the Pew Research Center show s that one in five American adults does not use the internet, with senior citizens, those with less than a high school education and lower income adults being the least likely to have access to the internet. (Smith, Zickuhr, 2012) Americans with disabilities are even less likely to use the internet. Nearly half of those that do not go online say that don’t because they do not feel the internet is relevant to them.One thing that is helping to bridge the digital divide is the ever changing face of mobile technology. With the face of mobile technology changing at a rapid pace, those that were on the other side of the digital divide are now able to go online. Out of those groups, young adults, minorities, those with no college experience and lower income adults are more likely to use their smart phone as a main source of internet access. Internet use has grown greatly among U. S adults. In a span of 16 year, June 1995 to Jan 2011, internet use among those 18 and over has gone fro m just 14% to 78%. Smith, Zickuhr, 2012) In these numbers the line is still senior citizens, minorities, and low income as those less likely to have online access. A majority of those that do not use the internet feel they do not need it or are cautious of new technology. The difference between 2000 and 2011 is significant. In June of 2000 only 50% of American adults used the internet. That number jumped to 80% in 2011. (Smith, Zickuhr, 2011) A household’s income plays a factor in internet use as well. In August 20111 only 62% of households with income less that $30,000 use the internet.When you compare these numbers to those making over $75,000 that have an internet usage of 97%, the Digital Divide is evident. The gap between whites and minorities is quickly disappearing. There are still some differences in internet access but they have become less noticeable and in some cases have disappeared all together. The strongest negative predictors for internet use are not race or g ender, instead those factors now include seniors (those age 65 and older), low income (under $20,000), and lack of a high school education.Among these groups there have been some increases in internet use, but there is still a gray area for some such as seniors. Even though those 65 and over are less likely to use the internet, 41% now do go online. (Smith, Zickhur, 2012) The reasons that adults do not use the internet vary. In the year 2000, 54% of American adults felt that the internet was a dangerous thing. This feeling was especially true among seniors and individuals with less than a high school education. Research also show that 39% that that access to the internet cost to much and 36% found the internet confusing and difficult to se. (Smith, Zickuhr, 2012) More recent research shows the biggest reason of not going online is the do not feel the internet is relevant to them. 48% do not want to use it or feel that do not need it to get the information they need. A majority of no n-users have never use the internet before and have no one in the household that does know how to use it. Only a very small percentage one in ten, are interested in using it in the future. One thing that is changing the Digital Divide is mobile technology as mentioned above. Currently 88% of Americans age 18 and over have a cell phone.With mobile technology expanding, 63% of American adults use a mobile device- Laptop, tablet computer, e-book reader, cell phone- to go online. The rise in mobile devices has caused a noticeable mobile difference. (Smith, Zickuhr, 2012) A person becomes more active using the internet once they get a mobile device. Of the mobile devices, smartphones are becoming more widely used than basic cell phones. Among American adults 46% now has a smartphone. (Smith, Zickuhr, 2012) There are groups that have greater levels of smartphone use such as higher income, well educated and those under age 50.These groups also have higher rates of technology use. Younger a dults (under age 30) do have a higher than average level of smartphone use no matter their income or education. Those younger adults with only a high school education or less are actually more likely to own a smartphone than older adults (age 50 and over) who have gone to college. The same holds true for income, young adults in the lower income bracket (under $30,000) are more likely to have a smartphone than older adults in the higher income bracket. Among these users, 25% say they use their smartphone as their main source of internet access.Smartphones are helping to bridge the Digital Divide. Computer sales during the holidays fell for the first time in 5 years as gadget use such as smartphones grows. According to Walker Sands a digital marketing agency, 23% of total global website visits came from mobile devices which is up from 17% in the 3rd quarter. (Leonard, 2013 These numbers show how big the shift is to how people connect. Former President Bill Clinton said in a key note s peech at the Consumer Electronics Show â€Å"Mobile Technology is doing so much now to lift the poor. Smartphones are a much cheaper way for internet access and the capabilities that go along with it such as mobile banking and social media. The smartphone is a unique item when it comes to personal technology and the Digital Divide. At the same time it represents the cutting edge of technology. It is of course the choice for people of any economic class as the most economical and efficient way to connect in an age where getting on the internet ranks up there as a top priority right below food, shelter and water.The Digital Divide will most likely always be there but with modern mobile technology it appears to be shrinking. It does affect people not only here in the United States but also people across the globe. If you look at recent technology and the future, the implications are without a doubt very fascinating. What would happen if everyone had an affordable computer in their poc ket or purse? What about the balance or more correctly imbalance of political power? All of this seems uncertain but the possibilities are endless.One thing that is certain, the Digital Divide will always exist. There will always be those that just cannot afford it in any form. There will always be that that just do not find the internet relevant in their lives. There will also be those that want to use the internet but don’t know how. The question that remains is â€Å"How much can we bridge the Digital Divide? † That question may never be fully answered. References Arnold , B. (2007 , Feb). Caslon analytics digital divides. Retrieved from www. caslon. com. au/dividesprofile1. tm Enger , J. (2011, June). Closing the digital divide. Retrieved from www. huffingtonpost. com/john/m-enger/economic-survival-in-the-_b_871575. html Leonard, A. (2013, Jan). Retrieved from www. salon. com/2013/01/11/smartphones_bust_up_the_digital_divide Rapaport, R. (2009, October). A short hi story of the digital divide. Retrieved from www. edutopia. org/digital-generation-divide-connectivity Smith , A. , & Zickuhr, K. (2012, April 13). Digital differences. Retrieved from http://pewinternet. org/reports/2012/digital-differences-aspx Digital Divide Digital divide is defined as the distance between those with access to the internet and those without. Digital Divide is a problem that stretches to all corners of the world. It affects not only people here in the U. S. but also countries across the globe. Two questions have to be asked in all this. The first is â€Å"Does the Digital Divide really exist? † and the second is â€Å"What is the real impact of the Digital Divide? † The idea of Digital Divide did not come into play until the early 1990’s with the passage by then President Bill Clinton of the High Performance Computing Act.What this act did was to provide funding for a high speed fiber optic network which would go on to become the internet that we use today. This enabled home computers to become more useful which in turn caused the number of personal computers in the U. S to skyrocket to over ten million in a five year period. (Rapaport, 2009) In all this a new department in the Clinton Administration was formed, The National Telecommunications and Information Administration. The NTIA is the President’s main advisor on information and telecommunication and was co-founded by Albert Hammond, a White House aide. Rapaport, 2009) It was Hammond in addition to NTIA administrator Larry Irving that came up with the phrase â€Å"Digital Divide† This phrase eventually began to appear in then V. P Al Gore’s speeches. As time went on, computer and internet prices began to fall. With these falling prices came the idea that the Digital Divide was closing. The new presidential administration did not have as great an interest in digital access and eventually â€Å"Digital Divide† became â€Å"Digital Inclusion. † The NTIA was eventually downgraded and its budget taken away. These actions eventually and effectively ended the NTIAThe question of it the Digital Divide is real can be answered by looking at the numbers, A report done by the Pew Research Center show s that one in five American adults does not use the internet, with senior citizens, those with less than a high school education and lower income adults being the least likely to have access to the internet. (Smith, Zickuhr, 2012) Americans with disabilities are even less likely to use the internet. Nearly half of those that do not go online say that don’t because they do not feel the internet is relevant to them.One thing that is helping to bridge the digital divide is the ever changing face of mobile technology. With the face of mobile technology changing at a rapid pace, those that were on the other side of the digital divide are now able to go online. Out of those groups, young adults, minorities, those with no college experience and lower income adults are more likely to use their smart phone as a main source of internet access. Internet use has grown greatly among U. S adults. In a span of 16 year, June 1995 to Jan 2011, internet use among those 18 and over has gone fro m just 14% to 78%. Smith, Zickuhr, 2012) In these numbers the line is still senior citizens, minorities, and low income as those less likely to have online access. A majority of those that do not use the internet feel they do not need it or are cautious of new technology. The difference between 2000 and 2011 is significant. In June of 2000 only 50% of American adults used the internet. That number jumped to 80% in 2011. (Smith, Zickuhr, 2011) A household’s income plays a factor in internet use as well. In August 20111 only 62% of households with income less that $30,000 use the internet.When you compare these numbers to those making over $75,000 that have an internet usage of 97%, the Digital Divide is evident. The gap between whites and minorities is quickly disappearing. There are still some differences in internet access but they have become less noticeable and in some cases have disappeared all together. The strongest negative predictors for internet use are not race or g ender, instead those factors now include seniors (those age 65 and older), low income (under $20,000), and lack of a high school education.Among these groups there have been some increases in internet use, but there is still a gray area for some such as seniors. Even though those 65 and over are less likely to use the internet, 41% now do go online. (Smith, Zickhur, 2012) The reasons that adults do not use the internet vary. In the year 2000, 54% of American adults felt that the internet was a dangerous thing. This feeling was especially true among seniors and individuals with less than a high school education. Research also show that 39% that that access to the internet cost to much and 36% found the internet confusing and difficult to se. (Smith, Zickuhr, 2012) More recent research shows the biggest reason of not going online is the do not feel the internet is relevant to them. 48% do not want to use it or feel that do not need it to get the information they need. A majority of no n-users have never use the internet before and have no one in the household that does know how to use it. Only a very small percentage one in ten, are interested in using it in the future. One thing that is changing the Digital Divide is mobile technology as mentioned above. Currently 88% of Americans age 18 and over have a cell phone.With mobile technology expanding, 63% of American adults use a mobile device- Laptop, tablet computer, e-book reader, cell phone- to go online. The rise in mobile devices has caused a noticeable mobile difference. (Smith, Zickuhr, 2012) A person becomes more active using the internet once they get a mobile device. Of the mobile devices, smartphones are becoming more widely used than basic cell phones. Among American adults 46% now has a smartphone. (Smith, Zickuhr, 2012) There are groups that have greater levels of smartphone use such as higher income, well educated and those under age 50.These groups also have higher rates of technology use. Younger a dults (under age 30) do have a higher than average level of smartphone use no matter their income or education. Those younger adults with only a high school education or less are actually more likely to own a smartphone than older adults (age 50 and over) who have gone to college. The same holds true for income, young adults in the lower income bracket (under $30,000) are more likely to have a smartphone than older adults in the higher income bracket. Among these users, 25% say they use their smartphone as their main source of internet access.Smartphones are helping to bridge the Digital Divide. Computer sales during the holidays fell for the first time in 5 years as gadget use such as smartphones grows. According to Walker Sands a digital marketing agency, 23% of total global website visits came from mobile devices which is up from 17% in the 3rd quarter. (Leonard, 2013 These numbers show how big the shift is to how people connect. Former President Bill Clinton said in a key note s peech at the Consumer Electronics Show â€Å"Mobile Technology is doing so much now to lift the poor. Smartphones are a much cheaper way for internet access and the capabilities that go along with it such as mobile banking and social media. The smartphone is a unique item when it comes to personal technology and the Digital Divide. At the same time it represents the cutting edge of technology. It is of course the choice for people of any economic class as the most economical and efficient way to connect in an age where getting on the internet ranks up there as a top priority right below food, shelter and water.The Digital Divide will most likely always be there but with modern mobile technology it appears to be shrinking. It does affect people not only here in the United States but also people across the globe. If you look at recent technology and the future, the implications are without a doubt very fascinating. What would happen if everyone had an affordable computer in their poc ket or purse? What about the balance or more correctly imbalance of political power? All of this seems uncertain but the possibilities are endless.One thing that is certain, the Digital Divide will always exist. There will always be those that just cannot afford it in any form. There will always be that that just do not find the internet relevant in their lives. There will also be those that want to use the internet but don’t know how. The question that remains is â€Å"How much can we bridge the Digital Divide? † That question may never be fully answered. References Arnold , B. (2007 , Feb). Caslon analytics digital divides. Retrieved from www. caslon. com. au/dividesprofile1. tm Enger , J. (2011, June). Closing the digital divide. Retrieved from www. huffingtonpost. com/john/m-enger/economic-survival-in-the-_b_871575. html Leonard, A. (2013, Jan). Retrieved from www. salon. com/2013/01/11/smartphones_bust_up_the_digital_divide Rapaport, R. (2009, October). A short hi story of the digital divide. Retrieved from www. edutopia. org/digital-generation-divide-connectivity Smith , A. , & Zickuhr, K. (2012, April 13). Digital differences. Retrieved from http://pewinternet. org/reports/2012/digital-differences-aspx