Creative Process Essay

When I think about artistic profession I often wonder why artists want to be artists. The very idea of beginning every day with the obligation to create something of strong value, something that never existed before, seems really hard work and at the same time activity that has a strange beauty in itself. How does an artist engage in the creative process and make something-out-of-nothing to come into existence? How does the creative process begin? Does it have structure, or the creative process consists just of imagery and an elusive sparkle that lights the creative fire in the artist’s mind? I spent a lot of time examining professional life and work of many creative artists and how they are engaged in the creative process. This paper will make some generalizations about creativity and genius that are fundamental to the understanding of the creative process and then will analyze the creative process in the lives of four notable artists who are Langston Hughes, Alvin Ailey, Quincy Jones, and George Lucas. The insights of the creative process then will lead to the exploration of creative process in my own life. The Creative Process Creativity is a constantly stimulating process and ultimately causing excitement. To observe and experience it fully is some of the most gratifying aspects of the artistic life and professional activity. One of the possible difficulties of exploring or analyzing the creative process is that it can become uninspired. Really, one of the most recent debates in this sphere is whether or not creativity is simply an instance of rational and analytical problem solving or consists of other, more magic processes. Nevertheless, one thing is obvious – the main benefit of exploring creativity and the creative process is that one will ultimately come to the understanding of the processes experienced and more importantly will be able to improve the development and stimulate cultivation of creativity in himself and other people. What is known about the creative process? Let us consider the main components of the creative process. At first, one should know difference between the creative product and the creative process. A general distinction is that the creative product is the output of the artistic activity. It is the artistic output that is to be determined as creative or not creative. What are the characteristics of a product that is considered as creative? Torrance (1988), for example, in an analysis of definitions of creativity, stated that newness is a principal defining characteristic of the creative product. Newness, however, is not the only criteria. It is also of great importance that the product is good (that is, artistically appealing). Vernon (1989) proposed a more comprehensive definition of the creative product stating that, â€Å"Creativity means a person’s capacity to produce new or original ideas, insights, restructuring, inventions, or artistic objects, which are accepted by experts as being of scientific, aesthetic, social, or technological value† (p. 94). It can be seen that cultural values and norms are a necessary part of the criteria for considering some artistic output to be creative. A major question then that emerges is â€Å"what are the creative processes that lead to the creative output? † What the creative process is involved that increases the chances that an artist will generate a creative output? If one can recognize the constituting processes involved and the character of their interaction, then one can begin to get a picture of the fundamental essence of the creative process. To do this, I will examine the major stages of the creative process in the next sections. One of the first well-known attempts to study and theorize the creative process was by Wallas in 1926. Wallas proposed the major stages that reflect different processes of the creative process. Although the stages proposed by Wallas are generalized and global, his model provides a good foundation for the understanding of the creative process. This two-stage model involves the following creative processes: 1. Preparation Stage. In this stage the artist gathers different information, becomes thoroughly proficient, and identifies the problem. It is in this stage that the fundamental techniques and knowledge base for realization of a particular goal are mastered. Usually, the fundamental cognitive processes of logic, associations, and creative problem finding should be primary in this first stage. The first creative problem finder I would like to mention is named Langston Hughes. Like many other noble artists, Langston Hughes found problems to solve with art. Langston Hughes found problems to solve with his creative writing. He loved to communicate with people and observe the sights and sounds of his district in Harlem and then incorporate this experience into his works. The artist found many fascinating ideas for poems during this process. Actually, some of his most renowned poems tell about the things he perceived with his creative mind and people he met in Harlem. In the same manner, Alvin Ailey found problems to solve with his own choreography. Thus, for example, Ailey made Afternoon Blues (1953), his first creative dance work. Working with a musical piece from Leonard Bernstein’s On the Town, Ailey performed the hypersensual, animalistic role of the Faun (Latham, pp. 481–482). In this great work of the artist, Ailey produced a mental image of dance as a liberation from heterosexual white domination, he found a safe place in his creative work where he could travel into his inner world as a fully sensual human being free from usual problems of race and sexuality. Another example of problem solving by the artist is Ailey’s creative reaction to Horton’s death (he was Ailey’s mentor): the artist decided to make dances that tell dance stories about dear people he knew. He created his first choreographic works to â€Å"pay tribute to Lester Horton, to demonstrate the strength of James Truitte, and to emphasize the beauty and dramatic ability of Carmen de Lavallade† (Latham, pp. 485–486). Ailey was creative problem solver: â€Å"I knew nothing about making dances for a group so I put everything about modern dance which I had read or seen into the work. In addition, I did everything the way that I thought Lester would have done it†¦. I was just trying to be like Lester because I thought that was the way to be creative† (Latham, p. 488). 2. Illumination Stage. In this stage of the creative process ideas are generated using the analytical thinking and logical working on the problem. It is in this stage that Wallas introduced the process of the unconscious associations. Creative problem solving is not consciously made, but much organizing in a different way and free associating takes place outside of conscious awareness of the artist. In the next sections, there are several descriptions of creative artists and their experience in this illumination stage. During this process thoughts are permitted to roam in an uncontrollable manner. It is here that creative processes may play a particularly important role. Artist may want to examine works of the past centuries or creations from different cultures for generating new images that are based on the already created idea. This type of exercise can be thought of as an essential part of the analytical and associative skills necessary for the creative process. To better understand how this works let us examine the history of film that is full of analogical and associative thinking. One of the most famous and popular examples of movie creativity is George Lucas’s original Star Wars film of 1977. The success of the film is legendary. Moreover, it completely changed how movies are produced. Interestingly, none of the visual images that the film producer used during the writing of the plot were themselves original. Film observers state that most of Lucas’s imagery was taken from previous film stories and George Lucas himself admits that his original models were the Flash Gordon movie serials and Edgar Rice Burroughs John Carter of Mars series of books: â€Å"I wanted to make an action movie – a movie in outer space like Flash Gordon used to be. . . . I wanted to make a movie about an old man and a kid. . . . I also wanted the old man to be like a warrior. I wanted a princess, too, but I didn’t want her to be a passive damsel in distress† (Interview with George Lucas). It seems that the screenwriter wanted to return to the sense of wonder and adventure movies that had expired him as he was a child but to update that sense for popular tastes of contemporary public and make good use of all the technological and cinematic new methods and devices that developed in the period that had passed since Flash Gordon. He one can see how Lucas was truly creative in this stage by incorporating in Star Wars the myth narrative; the screenwriter used a creative analytical and associative thinking and he succeeded. But this process was not a burst of inspiration; it evolved over a five-year period of rewriting and editing of the script: I began writing Star Wars in January 1973 – eight hours a day, five days a week, from then until March 1976, when we began shooting. Even then I was busy doing various rewrites in the evenings after the day’s work. In fact, I wrote four entirely different screenplays for Star Wars, searching for just the right ingredients, characters and storyline. . . . What finally emerged through the many drafts of the script has obviously been influenced by science fiction and action adventure I’ve read and seen. And I’ve seen a lot of it. I’m trying to make a classic sort of genre picture, a classic space fantasy in which all the influences are working together. There are certain traditional aspects of the genre I wanted to keep and help perpetuate in Star Wars (Zito 1977, p. 13). Important analyses on the cognitive processes involved in the creative process have been performed by a number of researchers. For example, Sternberg (Sternberg & Davidson, 1982) gave emphasis to the importance of insight in creative process. Sternberg and Davidson (1982) indicate that three types of insights are found in the creative process. First, the artist selectively separates relevant from irrelevant images. Selective union of separate parts brings about synthesizing isolated pieces of images into united wholes. In this way images are organized in new ways. This type of information gathering sets the stage for creative insights. Usually, creative artists have been transformed, have been inspired by, and often have plagiarized the ideas of other artist and from various cultures through the whole of history. This process can also be seen in Ailey’s work that echoed literary traditions of black cultural heritage, registering â€Å"the existence of a ‘black self’ that had transcended the limitations and restrictions that racism had placed on the personal development of the black individual. † Incorporating African American tradition and culture, Ailey’s creative work became an embodiment of African American culture. The artist’s creative process into concert dance was built on African American works and childhood memories. Ailey wrote about Redonda, later retitled Cinco Latinos (21 December 1958) that: â€Å"The innate sense of melodrama of the primitive ritual is exploited in this interpretation of an Afro-Brazilian fetishistic ritual, with movements based on both the sensual and animalistic elements of these rites† (Ailey program note). Ailey succeeded in the connecting the whole generation of African-American individuals with the mainstream U. S. culture. It is perhaps the ability to shift between stages that is important to the creative process. Such ability allows the artist to gain access to creative cognitive and affective processes. It enables the artist to transform or revise what he or she knows and to find new patterns. Like so many others in his time and after, creative record producer Quincy Jones in his creative process is both fascinated and inspired by the new media. He is enthusiastic about technology’s potential to move musical art one step further. This allowed Quincy Jones to succeed in creating real hits from ordinary singers and songs. When artists are engaged in these creative processes, they feel they are performing at the peak of their abilities. In my life I also feel that my creative work gives me insights and makes my live rich. Moreover, I think that creativity is part of what makes me really human allowing me to reach the highest levels of creative performance. Analyzing the creative artists’ professional life and creative act I identified the major personality traits that relate to tests of creativity and that I also try to develop. They include: †¢ openness to experience; †¢ independence of judgement; †¢ curiosity; †¢ preference for challenge and complexity; †¢ self-confidence; †¢ natural tendency to risk-taking; †¢ and strong motivation. These personality traits allow me to bring together various ideas and generate a new point of view or to create a new combination. I believe that analogies and associations are among the most powerful tools of the creative process because they can produce a great variety of ideas. Conclusion Study of the creative process is important for many reasons. Explaining the creative process helped me identify and realize noble artists’ unique creative talents. It is true that the creative artist may prefer to ignore the stages of the creative process and break all of the conventions. But my point of view is that this is the wrong way to think about creativity. Instead, I think of the creativity as a kind of the creative process language. Obviously, one has first to learn a language before he or she can talk. Similarly, it is nearly impossible to create anything without the foundation. And just because the artist uses the background from previous works or different cultures does not mean they are not creative. Examination of the artists’ creative process in this paper suggests that analogical thinking is important to the creative process. In general, access to and use of history, myths, legends, experience of other people and different cultures and creativity are related processes. For me, creative process is really a form of problem solving – not a miraculous, unexplained process. Wallas’ model of the creative process is a good start for analyzing creativity of other people. References Ailey program note, Kaufmann Concert Hall Dance Center of the 92nd Street YM-YWHA, 21 December 1958. Interview with George Lucas printed in the Star Wars souvenir program (New York: S. W. Ventures, 1977). Latham, Jacqueline Quinn. â€Å"A Biographical Study of the Lives and Contributions of Two Selected Contemporary Black Male Dance Artists: Arthur Mitchell and Alvin Ailey. † Ph. D. diss. , Texas Women’s University, 1973, pp. 481–482. Sternberg R. , & Davidson J. (1982, June). â€Å"The mind of the puzzler†. Psychology Today, 16, pp. 37-44. Torrance E. P. (1988). The nature of creativity as manifest in its testing. In R. Sternberg (Ed. ), The nature of creativity (pp. 43-75). Cambridge: Cambridge University Press. Vernon, P. E. (1989). The nature-nurture problem in creativity. In J. Glover, R. Ronning, & C. Reynolds, R. (Eds. ), Handbook of creativity (pp. 93-110). New York: Plenum. Wallas C. (1926). The art of thought. New York: Harcourt Brace. Zito, Stephen. â€Å"George Lucas Goes Far Out†, American Film, April 1977, p. 13.

KFC Marketing plan Essay

Executive summary: Kentucky Fried Chicken (KFC) continues to be recognized as an earliest franchising company around the world(Teampaperwarehouse.com,2014,2014). Approximately half of KFC’s worldwide restaurant businesses are owned and operated by independent businessmen and women, KFC franchisees(George L,Paugh III). Today KFC is the leading fast food chain and has been successful in creating a renowned international reputation. Since 1960 KFC has targeted many foreign markets and is able to expand in multiple continents in which they have initiated a new challenge in conquering Asia. It has served in more than 80 countries and 25 percent of its restaurants are operated and run by the Company. The report is based on information from range of data sources, including newspapers, magazines, company reports, books and academic journals. Introduction Swot Analysis helps to know a firm where they are lacking behind and what Internal and External factors they are or can face in future.By taking the time to conduct this analysis you will gain a fresh prespective on what KFC offers, what obstacles KFC face, what competitive challenges it have to overcome, and what barriers to growth exist now or might exist going forward. KFC has been an established business but it can also face some problems which SWOT Analysis helps firms to recover. KFC operates in 74 countries and territories throughout the world. It was by Colonel Harland in Corbin, Kentucky. The business was then sold to two Louisville businessmen. In 1966 KFC was listed in New York Stock Exchange.Heublein Inc. acquired KFC in 1971 but soon after conflicts arose between Colonel and Heublein over quality control and cleanliness issues. In 1986, Pepsi Co acquired KFC, by that time KFC had expanded to 55 countries with over 6600 units. Due to strategic reasons, in 1997 PepsiCo spun off its restaurant businesses (Pizza Hut, Taco Bell and KFC) into a new company called Tricon Global Restaurants,  Inc. Today KFC is an iconic brand that is recognized in nearly every country around the world. The competitors of KFC have taken over a large market share. According to findings McDonalds about 35 percent of the share in Sandwich Segment while the Burger King owns about 16 percent of the market share in fast-food industry. The local restaurants in different countries where KFC has presence pose a threat to the company. KFC outsanding brand recognition, experienced management, high quality food, advanced operational systems and unique global infrastructure position help them to capitalize on global opportunities (Panda123,2013,Business and Economics). References: http://www.termpaperwarehouse.com/essay-on/Kentucky-Fried-Chicken-Kfc/38247 viewed on 25th April 2014 Functions of Management by Gpaugh [online] Available at http://www.studymode.com/essays/Functions-Of-Management-620143.html viewd on 25th April 2014 Antiessays.com.(2014).Strategic Management of Kfc – Essays by Panda123.[online] Available at http://www.antiessays.com/free-essays/strategic managment-ofokfc-193565.html viewed on 26th April 2014 Marketing mix Available at www.entreprenuer.com/artcle/70824[online] viewed on 26th April 2014 Postioning.(2014) Available at www.strategicmanagmentinsight.com viewed on 28th April 2014 The Economic Times.(2005).KFC target women customer.[online]Available at http://articles.economictimes.indiatimes.com/2003-07-16/27531245_1_kfc-soul-food-chicken viewed on 27th April 2014 Tracy, B.(2014).Marketing.business-The 7 Ps of Marketing.[onlione] Entreprenuer.Available at http://www.entreprenuer.com/articles/70824

What contribution does human resource management brings towards its Literature review

What contribution does human resource management brings towards its employee related performance - Literature review Example Properly designing and measuring performance is one of the basic and decisive steps that HR can do to affect performance. Performance can also be effectively raised by considering the intersections between individual, team, and organisational motivations. Some studies agree that HR can influence performance, primarily through affecting employee attitudes and behaviour (Tsai, Edwards, & Sengupta 2010), but the causal relationship between the two is said to be more complex (Nishii, Lepak, Schneider 2008). Niishi et al. (2008) explore the right interpretation of HR efforts from the individual perspectives of employees, in order for the target attitudinal and behavioral changes to be achieved. This paper seeks to explore how HR affects employee performance. After carefully reviewing literature, findings showed that HR practices can impact individual performance through an effective performance management system and it can raise team and organisational performance through mediating factor s, such as performance management, emotional intelligence building, collaboration, and affecting organisational culture and employee engagement and satisfaction. Performance of the individual, teams, and the whole organisation Human resource management has evolved to strategic HRM, which designates HR manager as strategic allies to managing performance (Zink 2008). In particular, it is engaged in management development, organisational culture, appraisal system, discipline, environmental issue, diversity, culture, and HR policy dimension (Nemiro et al 2008). Though some still assert that HR should only focus on human resource performance, there is growing evidence that HRM can directly affect performance across different levels, by creating different systems that can impact organisational performance (Tsai et al. 2010; Nishii et al. 2008). Sources argue that HR practices can impact individual performance through mediating effects on perceptions of the connection between reward and pe rformance and management skills. Properly designing and measuring performance is one of the basic and critical steps of performance management. HR can create an effective performance management system to impact individual, team, and organisational performance (Chuang & Liao 2010). Tsai, Edwards, and Sengupta (2010) build on and test an alternative view of the association between HR and organisational performance. Their model argues that organisational performance affects employee attitudes and that the performance-attitude relationship is mediated by HRM practices. To test their model, they conducted management interviews and employee surveys for thirty-two small firms in the Midlands of England that come from diverse industries. Findings showed that HRM practices are directly related to two measurements of employees' attitudes: â€Å"perceptions of management skills and the perceived link between reward and performance† (Tsai et al. 2010, p.15). This provides evidence that H RM can impact links between reward and performance. Chuang and Liao (2010) and Zhang and Li (2009), however, specifically argued for the importance of high-performance HR practices, which focus on concern for internal and external customers to achieve better market performance. In improving team performance, the rewards system must rationally inspire team performance measures (Nemiro et al. 2008). An appropriately-designed reward and pay system can motivate individual members to work as a team (Nemiro et al. 2008, p.63). This means that HR performance management efforts and tools must promote collectivity among individual members, so that each member values and respects each other’s impact on the total team performance. Rajagopal and Rajagopal (2008) investigate team performance in the article, â€Å"Team performance and control process in sales organizations.† The researchers observe that the main characteristics of a good team are that they

Major League Baseball Essay Example | Topics and Well Written Essays - 750 words

Major League Baseball - Essay Example It uses a unique video editing information system as a product differentiation strategy that allows employees to produce highlights in just a few minutes, sending out about 200 highlights a day during the regular season and meeting a wide range of customer needs. The buyer’s volume and importance of the product are evident from its sales levels and demands for the MLBAM (Case Study 2). The product generates around $ 450 million a year in revenues, out of which fifty percent comes from fans with the balance generated from advertising that comes with online content. Supplier power Supplier strength for MLBAM is visible in its strong command and concentration in the online sports content business that has been hugely successful judging from the impressive revenue performance, satisfied users given the amount of information, updates received and convenience. The company has also succeeded in product differentiation because it offers the product in a unique way and targets niche ma rket. It also uses different technological platforms that apply a plug or a battery such as computers, laptops, and mobile phones to send clips of streaming video and text, thus creating utmost convenience informing viewers and fans about what they need to know. The product has capabilities to tap into the base by presenting multiple (camera) angles, on-demand video, and stats. Another aspect of supplier power for MLB is its specialty in providing a large amount of online information that is unavailable anywhere else or on any other device. Further, online content business has become a popular source of information for many users, thus creating immense business viability for suppliers who offer unique products and services with the objective to meet the needs of the different online customers. MLB has identified these needs and perfectly tried to meet them through their product. Increasing customer loyalty To maintain and/or increase customer loyalty, MLBAM should employ strategies that jealously guard its existing market share and also explore ways of expanding the customer base to grow revenue and increase business performance. Product differentiation based on customer segments is one of the strategies the company can use. Though it targets to introduce customized applications for certain models of cell phones, it can expand the scope to cover other handsets and also include other non-phone gadgets such as iPads. The company should also explore the strengths and limitations of its competitors by interrogating the soft spots of alternative products to strengthen its products. Other strategies may include going an extra mile to know its customers better, meet and exceed customer expectations, increase value derived by customers from its products, and endeavor to distinguish between needs and wants. Which of Porter's three generic strategies is MLBAM following? Porter’s generic strategies are: segmentation strategy (focus) for a narrow market scope, diff erentiation strategy for a broad market scope with competitive advantages of uniqueness and competency, cost leadership strategy for a broad market scope with advantages of low cost and competency. MLBAM seems to have adopted the differentiation strategy targeting a broad market but ensuring uniqueness and competency as the selling points. How can MLBAM use efficiency IT metrics and effectiveness IT metrics to improve

Who Were the Villains of Roosevelts Famous Address Essay - 3

Who Were the Villains of Roosevelts Famous Address - Essay Example Roosevelt did this for both political and personal reasons because in doing so he was assured of letting the people know that he was aware of their suffering and that he would fight for the small man, not large corporations.Roosevelt clearly addresses banks and big business as the villains of the nation at that time. He states, â€Å"The rulers of the exchange of mankind’s goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and have abdicated.† Roosevelt was speaking directly to the people about those that had been in business, had made their money in the stock market and by credit, and had found that, once the market crashed, it was no longer a viable playground. Overnight those that had money suddenly did not, and neither did the rest of the country. Roosevelt also spoke of their unnecessary existence by saying, â€Å"Happiness lies not in the mere possession of moneyÍ ¾ it lies in the joy of achievement, in the thrill of creative effort.† In this way, he was also denouncing those that had made their money in the stock market, for too many had been eager to sink everything that they possessed into it, only to find that the promises that had been made were empty.Politically and personally, Roosevelt made no assumptions that fixing the country of its problems would take place overnight, but rather invited people to stay with him for the long haul. In denouncing the banks and big businesses, he let people know that, first and foremost, he was not out of touch with the woes of the common person. Roosevelt knew that people were suffering. He also knew both politically and for the good of the country as well as his presidency that he had to unite them and show them that their suffering was something to be endured together, as was rebuilding the country. He even made sure to let the people know that things would change without the usual political red tape, stating that he would ask Congress , if they failed to take his recommendations into account, for â€Å"broad Executive power to wage a war against the emergency.† By doing this, he made sure that the people knew that he was behind them, not big businesses, and would work to put them back to work and see the nation back on the road to prosperity.

Legalization of Drugs in United States and Mexico (based on drug Research Paper

Legalization of Drugs in United States and Mexico (based on drug problems, trafficking, and cartels between these two countries) - Research Paper Example egardless of the legality; or allow the illegal status of drugs to continue to foster an environment and business that spreads violence, fear, insecurity, and the loss of life into American communities (Morris 36). Instead of wasting a lot of the government resources in trying to suppress the use of the drugs, the state should run a campaign that is information oriented so as to enlighten people about the risks and even possible consequences of using many kinds of drugs. This paper seeks to analyze whether the use of drugs should be legalized or not in the United States and Mexico based on the problems that are associated with the drugs that create cartel between the two countries. In the United States, purity of illegal Amphetamine in most cases is below 5%, and some of the tablets that are sold in the marketplaces are sold as ecstasy that do not contain MDMA at all. Instead, a lot of drugs are adulterated with other substances like chalk and even talcum to form completely different drugs. When the use of drugs are made legal then the state can get it very easy to regulate their sale and availability in the market to make sure that they are very safe and clean for human consumption and that they ate not cut with other substances that may be harmful to human life. Making the use of drugs illegal by the state increases the amount of crime that could have been easily eliminated if the drugs were legalized. Controlling the prices of the drugs would imply that drug addicts would leave their habits of stealing so as to fund their habits of using drugs. On the other hand state provided drugs services would keep out the drug dealers out of the business thereby starving the criminal gangs of their primary source of funds. Most Taliban get a lot of their revenues from the sale of poppies which gives a good ground for the heroin. They participate in doing this through intimidation farmers in the local regions who would otherwise sell their produce at the market places

Strategic Management Essay Example | Topics and Well Written Essays - 500 words - 14

Strategic Management - Essay Example The scope of the report is centered on analyzing the external and internal conditions of the organization. This gives details of the position of the organization in the industry in which it operates in. The internal analysis provides essential factors that are necessary for Fortescue’s growth as an organization in both the short run and the long run. On the other hand, the external analysis is based on three major fronts which include competitor environment, industry environment and general environment. The sources of information used to gather data for the report are quite reliable and sufficient. The SWOT Analysis Between Myth and Reality, is a journal that has widely been used to explain the internal analysis of the organization that helps reveal various factors that the organization has put into consideration as far as strategy is concerned. Another major source that has been used is Contemporary Strategic Management to explain the strategic approaches that the organizatio n uses. However, these sources had various limitations. Some of the sources were not easily available and some of the website sources are subject to change due to updates. However, the report was able to deduce substantial findings from the sources. The external analysis, such as the political element, is influenced by which policies the government employs. The strategies that the Fortescue tries to engage are adjusted to fit the changes that occur in the external environment. On the other hand, the organization has complete control of the internal factors, such as its strength, and can always manipulate it in order to remain competitive in the market. There are various recommendations that have been made by the report. As a start-up business, Fortescue should always be on the look out of the opportunities that are available for it in both the external and internal environment. They should utilize every possible opportunity in order to increase its competitiveness in the

Pyramid Business Structures In China Essay Example | Topics and Well Written Essays - 4000 words

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Ip2 1 managing organizational change Research Paper

Ip2 1 managing organizational change - Research Paper Example away from their daily operations, it raises an opportunity of making them focus on the issue at hand, thus making it possible to meet the goal of the organization (Dyer Jr., Dyer, & Dyer, 2013). Time - mostly, meetings go overtime and still some issues are either covered inadequately or not at all. There may be need for more than a day and this may put off members of the community who have other matters to attend to. Information sharing- the R&D organization would get an opportunity to share more information with the community on their desire to improve the performance of the organization. This way, the community also has an opportunity to give ideas on how to achieve this. Silent participants- there is a likelihood of having silent participants hence some significant opinions may be left out. This is because some people are fearful by nature and engaging everyone in such a large meeting may not be possible. Encourage teamwork- such a meeting would be a great opportunity to encourage teamwork among all the involved groups. This is because they will get a chance to brainstorming and together they will come up with

Biotech Case Study Example | Topics and Well Written Essays - 750 words

Biotech - Case Study Example At the beginning of my lessons, I learnt that biotechnology involves the utilization of bioprocesses and living organisms in medicine, technology and engineering. This knowledge shook my lay knowledge of what the term means. I realized that the chief objective of biotech was the modification of the organism in order to fulfill human needs and purposes (Jefferis 47). The application of technical and scientific advances in the development of products is the entire business of biotech. It is imperative to note that biotech does not only draw its entire knowledge from pure biological sciences, but also from information technology, chemical engineering and bio-robotics. I was amazed to realize the numerous fields that biotech finds useful applicability, and this paper will shift its focus to provide a brief overview and highlight these uses. The initial applicability of biotech is in the field of medicine. Although I had a faint clue that biotech was useful in medicine, I was not sure how the two fields were connected. Therefore, I took a keen interest in lessons; the lessons revealed that biotech was the pillar of pharmacogenomics and the synthesis of pharmaceutical products, which can be regarded as essential in medicine (Jefferis 50). Further, biotech solves issues that arise from genetics testing, and it is used to settle cases that involve identity and parenting disagreements. Furthermore, biotech holds the lifeline for gene therapy and cloning; the latter is widely applied to create clones that donate organs to people, prolonging their life. The world faces the danger of food crisis as a result of rapid growth of the population; the rate of population growth beats the capacity of the planet to produce subsistence. Further, pest and crop diseases result to crop failure, not forgetting erratic, unfavorable weather conditions. Biotech stepped in to address the issues that face agriculture. In agriculture, Biotechnology is applied to improve crop yields in a remar kable way; this ensures plenty of yields from a small area of land. I was able to understand how biotech has facilitated the development of drought resistant and pest resistant crops (Jefferis 56). These crops were well advanced that they could withstand environmental stresses, and give yields that have advanced nutritional qualities. Further, biotech has enabled scientists to minimize pesticide and fertilizer dependency. As such, the crops that grow under this technology can be altered to produce plenty of substances that tend to be novel. Livestock breeding and cross breeding has strong associations with biotechnology; it facilitates the production of high producing animals, which are also resistance to diseases and parasites. Furthermore, I learnt how bioremediation facilitates a safe way of reclaiming an environment that has been contaminated through developing organisms that clean up the mess. These organisms do not have negative impacts on the environment. Further, biodegradat ion is extremely significant in decomposing wastes to allow release of humus (Jefferis 62). This process is essential in enhancing the flow of the energy cycle. This technology allows the development of strains of bacteria, which attack wastes and allow for more disposals. The above knowledge was extremely helpful to me because it opened my eyes and my brain to plenty of knowledge, which I had taken for granted for a long

The Death Penalty Essay Example for Free

The Death Penalty Essay The death penalty is a capital punishment that is put into effect for major crimes. The death penalty is a very controversial topic in the United States and throughout the world. There was a time period were the death penalty was banned for about four years in 1972-1976. Many feel that the death penalty is justice because it is retribution toward criminals who have committed heinous crimes. However the death penalty is inhumane and should be abolished in the United States. The death penalty has been around since the beginning of civilization. â€Å"Capital Punishment has been practiced in most known societies over the course of humans history† (Garland 30). The website Introduction to the Death Penalty states that the death was first established for 25 different crimes, however, over the years the laws have changed. Fortunately, only one-third of the world still uses this type of punishment. There are only a few developed countries that have the death penalty, such as Singapore, Japan, Taiwan, and South Korea. The most recent countries that have abolished the death penalty because they deamed it inhumane are Burundi, and Togo in 2009, and Gabon in 2010. Unfortunately the U. S. is one of the few developed countries that still have the death penalty. Writer Scott Christianson says, â€Å"In the United States, however, serious consideration of abolition was slower in the coming, for political reasons. On the one hand, capital punishment had been used since the earliest days of exploration and Colonization; it was still legal in all but a few states† (176). In the U. S. nly fourteen states have abolished the death penalty, the most recent states to abolish the death penalty are New York in 2007, New Mexico in 2009, and Illinois in 2011. Writer Michael Meranze says, â€Å"Europe redefined itself as a death penalty- free zone and seventy countries around the globe abolished the death since 1976, where us the United States not only reinstated capital punishment but thirty-six states and the federal government expanded its use and provenance† (Garland et. all 73). â€Å"Since 1977, 611 people have been executed in the United States †¦. xecutions in the U. S. have been carried out at an increasing rate, with more than half of the executions since 1976 having occurred in the last five years† (Barry). The United States has used many different methods to execute prisoners over the years. Two of the first methods were hanging and firing squad. Although these methods are considered archaic now, there are still some states that allow the use of hanging and firing squads. These states that can still use hanging are Delaware, New Hampshire, and Washington. States that can still use firing squads are Idaho, Oklahoma, and Utah. Another method of execution that was used for years in the U. S. is the electric chair. There is currently only one state that still uses the electric chair as its main method of execution, which is Nebraska. Another method that is rarely used but is still on the books for some states is the gas chamber. Writer Scott Christianson says, â€Å"The earliest gas chamber for execution purposes was constructed in the Nevada state penitentiary at Carson city and first employed on February 8, 1924 †¦(1). States that still have the gas chamber are Arizona, California, Missouri, and Wyoming. The main source of execution for all states with the death penalty [with the exception of Nebraska is lethal injection. Lethal injection is puts poisonous drugs into a person’s bloodstream to kill them. However because the poisonous drug is so expensive some states are starting to use the same drug to put down animals for human beings. Advocates claim that having the death penalty for crimes deters crime because they think people are scared of punishment; however, the death penalty does not deter crime. The death penalty is useless because the criminals committing the crime are not thinking about the death penalty but rather how to stay alive. â€Å"The attempt to reduce murders in the drug trade by threat of severe punishment ignores the fact that anyone trafficking in illegal drugs is already risking his life in violent competition with other dealers. It is irrational to think that the death penalty – a remote threat at best – will avert murders committed in drug turf wars or by street-level dealers† (Bedau). This shows that the death penalty is not stopping murders from occurring. The introduction to the death penalty conducted a survey were top criminologists stated that the death penalty does not deter homicide rates (Introduction). â€Å"For 2009, the average Murder Rate of Death Penalty States was 4. 9 [Murder rates by the 100,000], while the average Murder Rate of States without the Death Penalty was 2. 8† (Introduction). Not only does the death penalty not deter crime but it is also very expensive. The death penalty costs so much because of the appeal process. The appeal process is a very long and expensive process that can go on forever and costs the government millions. Many assume that abolishing the death penalty is wrong because it becomes unfair to the taxpayers because they think the cost is less than that of life in prison without parole. However life in prison is less expensive than the death penalty (Bedau). The death penalty is actually three times more than keeping a prisoner in prison for life without parole (Messerli). Death penalty trials are costly as well. â€Å"[S]tudies estimate that death penalty trials cost $1 million more than trials in which the prosecutors seek life without parole† (Introduction). Therefore the government needs to stop executing people because it is unfair to the taxpayers. The death penalty costs one-hundred thirty-seven million dollars annually. Writer John Van De Kamp says, â€Å"With California facing its most severe financial crisis in recent memory—with draconian cuts about to be imposed from Sacramento that will affect every resident of the state—it would be crazy not to consider the fact that it [The Death Penalty] will add as much as $1 billion over the next five years simply to keep the death penalty on the books. Therefore the government needs to rid of the death penalty in order to put taxpayer’s money to better use. One of the biggest problems with the death penalty is that it is racially imbalanced. Juries assign the death penalty more often to minorities than to Whites. â€Å"Capital punishment opponents argue that racial bias on the behalf of prosecutors, judges, and juries results in disproportionately high numbers of convicts and death penalties for African-American defendants† (â€Å"Issues†). The defendant who is a person of color is much more likely to get the death penalty if the victim is white. [A]s of 2002, 12 people have been executed where the defendant was white and the murder victim was black, compared with a 178 black defendants executed for murders with white victims† (Bedau). There are still these uneven numbers in death row to this day. There has been evidence in murder cases that juries have been racist and have sentenced some people to prison while others, mostly black, have been given the death penalty (Bedau). Minorities are disproportionately given the death penalty with a 43% of executions since 1976 and a 55% awaiting the death penalty (Bedau). These facts are shameful to the country. Another big reason why the U. S. shouldn’t have the death penalty is the financial imbalance among defendants. People who have money have a better chance of being proved innocent because they can afford better attorneys than poor people. Professor Scott Philip from the University of Denver says, â€Å"Defendants who hired counsel for the entire case were never sentenced to death. Even defendants who hired counsel for a portion of the case were substantially less likely to be sentenced to death than defendants with appointed counsel† (American). These who can’t afford attorneys have to rely on public defenders, who are incredibly overburdened in their jobs and are sometimes in competent. â€Å"Poor people accused of capital crimes are often defended by lawyers who lack the skills, resources, and commitment to handle such serious matters. This fact is confirmed in case after case† (Bright). This unfortunate act committed in this country leads to people being wrongfully sentenced. Because of the racial and financial imbalances, even proponents of capital punishment should recognize that the system is broken. A part of the death penalty that people tend to avoid is the fact that woman and men are executed (Messerli). Wrongly sentenced people are one of the biggest problems with the death penalty. â€Å"How many innocent people will the United States execute before we stop this barbaric punishment? † (Dicks 31). The number of people that have been executed, that were later found innocent is not the ideal numbers that people want to hear. â€Å"Total of 69 people have been released from death row since 1973 after evidence of their innocence emerged† (Dieter). In the Bedau-Radelet report on ‘Miscarriages of Justice in Potentially Capital Cases,’ it was reported that 350 people have been wrongfully sentenced, twenty-three of which were actually killed by the state before they were found to have been innocent† (Dicks 79). There is no way to ensure that this won’t sometimes happen, so the U. S. can’t ethically use the death penalty. The biggest reason that there should not be a death penalty is that it is morally wrong. â€Å"It violates the right to life as proclaimed in the Universal Declaration of Human Rights† (Abolish). It also can’t undo what’s already been done. It is useless in that it doesn’t bring the victim back to life† (Messerli). The death penalty doesn’t help anybody and doesn’t show that killing is ok. Therefore, â€Å"It sends the wrong message: why kill people who kill people to show killing is wrong† (Messerli). The United States is one of the most elite nations in the world; however, people in the U. S. don’t have the sense to get rid of the death penalty. The penalty is inhumane and should be abolished in the United States. This punishment goes against everything the U. S. stands for and it is a denial a humans rights to live. Throughout our history, critics have tried to brand the death penalty as the vestige of a mad primitive age, a practice that an enlightened society would reject. And each time they have advanced their case—but only so far† (Kay). People need a government that is fair to all and does not deny people their rights to live. People need a government that will not just settle with just, but will fight for what is right for the people of the United States of America. â€Å"Why should a nation that casts itself as a leader in the battle for human rights resist so tenaciously the elimination of a practice so self-evidently a holdover from darker times? †

Stock Market and Macroeconomic Variables in India

Stock Market and Macroeconomic Variables in India Chapter I: INTRODUCTION Overview Investment is dependent on human behavior. Keynes (1936) elaborates which sort of behavior humans adopt while investing particularly in capital market. Usually people get in use with their â€Å"animal feelings† and â€Å"flock mentality†. Economic and social and political environment also affects the opinion of people and they force them to think several times before investing. This is the reason one cannot forget the fact that the value of economic activities and information nourished to the market is vital. Here we are going to discuss the tendency of animal spirit in India. The propensity of animal spirit in India is very much high-flying. The major reason for this is that only 2% of the population of India participates in such activities. The medium to get knowledge of market and accuracy in information is not available easily. This forces people to act as per their nature rather than their logic. The core theme of this analysis is the study of interrelation betwee n real economic variables and capital market variables. The significance of this relationship has got marvelous recognition in the past due to roller-coaster ride of the BSE. A few academics also claim that it is not greatly shored up by the financial basics. To determine the character of these basics in studying the stock prices, different people have done different researches. Amidst of these thoughts, some fundamentalists have tailored theory of Efficient Market Hypothesis (EMH). This theory was further extended by Fama in 1971 to narrow and categorize such business centers on the foundation of their response and data nourished to them in feeble, partially built and well-built markets. Another theory which is Popular Model Theory shows a different perspective in general. This theory explains the qualitative clarification of price which shows that most of the people proceed inappropriately to the information which they get and easily accessible information is not included in stock market price as Efficient Market Hypothesis verifies which is also much analogous to Keynes model. These days, everyone in the world is running after word money (finance). Nothing is possible without money and economy and other financial operations including growth of this whole world are also dependent on the same. Without finance, no one can turn the wheel of economy at 360 degree, because each and every transaction needs money at its core. Amadou (2007). In the past, there was a system in use, which is barter system. To avoid its complications, ‘money- component of finance was introduced and as then, money has been the most precious thing of the world. It has become a need for every individual to fulfill the requirements. Money is the core object needed to establish a business. The most valuable source of this sort of money is the post laissez-faireization period is stock markets. In todays world, each and every individual can witness the appearance and acceptance of the capital markets in the period of Globalization. This is considered to be highly regarded as an award f or the globalization years to under developed regions to enlarge and reinforce their nitty-gritty as their financial crisis is gratified to an extent by these stock markets. Capital markets are also considered to be a profitable platform for firms to get financing for their new or forthcoming projects and moreover for people as a prospect to invest with chances of risk but huge profits. The establishment of such capital market is the most important aspect for companies and individuals. It is also a valuable state of the prerequisite of economy on the degree required in a contemporary varied economy. The subsistence of such markets persuades the existence of such arguments shaped in the hoisting of money can be transmitted. Current Situation â€Å"Thus if the ‘animal spirits are dimmed and the spontaneous optimism falters, leaving us to depend on nothing but a mathematical expectation, enterprise will fade and die;-though fears of loss may have basis no more reasonable than hopes of profit had before. . . . . . . But individual initiative will be adequate only when reasonable calculation is supplemented and supported by animal spirits. . . . . . . .† Keynes (1936). In the above quote, Keynes (1936) has very bluntly and accurately explained the reasons undercover of the current situation along with the entire humankind is getting exaggerated in our day in 1936 merely in one of his leading models. A few economists have also accepted in an extremely enjoyable method which it is not the object that the worth of our productivity has decreased or lowered but just only the animal feelings are fainted and what we were expecting is that the value of our capital market has boosted is wrong in comparison with the primordial epoch and regard as added rise in actual value improbable. And every financial system requires such â€Å"animal spirits† or the positive behavior along with the estimated threats and reserves to became visible and outshine and development. Since her independence, India was following the socialistic outline for growth, but after the 1990s financial crisis, India had to make some strict financial improvements as proposed by World Bank. The most vital factors of that package were financial liberalization. This financial change cemented a new way for India to boost its economy and make developments and gave India impulsive environment to the financial markets specifically in language of BSE BSE which is supposed to be solitary of the major components of Indias fiscal hike. These days, capital markets has considered to be the most valuable source to transform domestic savings to upcoming productive projects and provides a chance to the country to develop. Brigham (2008) According to a survey conducted in India, around two percent of the general populace is directly caught up in capital markets but when anything happens to such financial markets, it is the whole population which get affected, which clearly shows the correlation, impact and importance of these capital institutions and actual economy not only on the ground intensity but also bottomless within the main rank. In these days, newspapers are bombarded with such sort of news and major newspapers also issue supplement for financial news. Due to such releases, there is a little doubt that the macroeconomic news which is vital to capital market will be affected. In recent years, the whole financial market of the world had crashed and with the recession in capital market, a gap has been established which lead to decrease real economic fundamentals. Consequently, it also boosts the value of this study because the focal point of this downturn is considered to be the capital markets and if we consider it the other way, a nation can become economically strong by considering such markets. So, it can easily be said by any person that it seems to be that the stock prices will go up and would result in the formation of some talented analysts of upcoming values of macroeconomic pointers similar to productivity growth and price increases. If one takes this thoughts then this would definitely result in arose of two more questions that what will make the market create hyper boom and incorporation of capital market with other marketplaces. Agrawal (2008) The most suitable reply to be given to the earliest query is that the flow of information rise which has crowded the market, for instance, media (commerce news channels). Another rebellion that shocked the market is Information Technology. The shortage of skilled people in IT in the US has also become highly required after stocks due to their fantastic dough take home power. The other question which is creating a fuss is regarding the connection of such capital markets with the actual financial system. Different analysts have also studied regarding this theory and worked on this linkage. Ando and Modigliani (1963) developed a theory called life cycle theory which is based on the linkage between stock prices and actual spending. The theory talks about the individuals decisions and states that people mark their expenditure verdicts on the conventional life span earning, division of which might be detained in capital connecting to capital cost variation to variation in using up expenditure. Beck Levine (2001 2008) In the same manner, the linkage between capital costs and investment spending is supported by q theory. The q theory is designed by James Tobin (1969) to analyze the effect of stock prices on investment spending, where q stand for fraction of total retail worth of comapnies to the substitute value of their on hand capital market at recent stock prices. In addition, we had also discussed EMH model. With this research we have concluded that none of these theories fit into the actual and recent image of stock markets. Some fit partially but no one is perfectly related. To analyze such issues, there should be more research to be done on this for better understanding and the below paragraph communicates it in an improved way. â€Å"We should not conclude from this that everything depends on the waves of irrational psychology. On the contrary, the state of long-term expectation is often steady, and, even when it is not, the other factors exert their compensating effects. We are merely reminding ourselves that human decisions affecting the future, whether personal or political or economic, cant depend on strict mathematical expectation, since the basis for making such calculation does not exist, and that it is not innate urge to activity which makes the wheels go round, our rational selves choosing between the alternatives as best we are able, calculating where we can, but often falling back for our motive on whim or sentiment or chance.† Keynes (1936). Structure of the Dissertation This study is stepped into five chapters and this is to be pointed that the register worth has been taken from all the factors. The first chapter thoroughly gives the overview of the current situation. The second chapter is based on the literatures related to our study. The third chapter comprises of a bunch of points and statistics and method considered in this analysis. The fourth chapter will explain the estimations and result analysis. Chapter five exemplifies the results, policy insinuations and boundaries of this analysis effort. Research Questions What is the relationship between stock market and macroeconomic variables in India? Is there an informal relationship between capital market and real economy? What is the influence of investment on financial health of India? CHAPTER II: LITERATURE REVIEW Introduction The word economics has emerged to be the most powerful word. Each and every individual is running after money and always try to earn as much as the one can within the shortest possible span. Without finance, no one can imagine running any sort of business and it has become an essential which runs the businesses and all the major features begin and finish at it. In recent world, the quickest and trouble-free way to earn money for new and challenging projects is to publicize or to enter into the stock markets where a little investment can make the wise firms accelerate and helps these firms to become giants amongst the other big names. Chauvet (2009) There are around two percent of the entire inhabitants in India which is caught up in stock markets but the whole population in India gets affected either directly or indirectly if anything good or bad occurs in such markets. This clearly shows that Capital Markets and Actual Economy both have strong and vital link on not just only the les ser stage but also on the higher stage. A number of studies and researches have been done in this regard but the outcomes are vague. The reason for this is that most of the researchers have found a tough bilateral linkage among capital markets and actual economy. On the other hand some researches have entirely rejected this analysis that stock markets and real economy are correlated. To study more deeply we can distribute numerous theories in 3 schools of thoughts on the ground of the literature review: first school of thought says that there is no linkage between capital market and real financial factors. The second school of thought has analyzed that there is an informal link among stock market and macro economic variable. The last one which is third school of thought promulgates an unclear belief that there is a relation between the two but not positively in both short and long run. Pindyck (2004) This research is comprised of some on hand literature which has been reviewed relating to the above problems. Below we have discussed the overall findings of different researchers. First School of Thought Chowhan, P.K. et al. (2000) The first school of thought attempted to obtain reasons for hurly-burly in capital market in small period in India considering BSE as the major indicator. In the period from 2008-2000, capital markets in India had shown irregular and unstable activities which does not go with the information provided to them. Due to the severe up and down in the stock prices, the investor confidence resulted in turmoil in the markets. The school of thought tried to explain that what could be the actual causes at the back of instability and what made Efficient Market Hypothesis (EMH) by Fama cant explain the reason. The researchers attempted to find out the reason of such huge rise in BSE stock value. On October 2008, BSE was at 2761 and in February 2000 it went at 6000, which shows 117% appraisal in just 15 months, which is not powerfully maintained by basic financial factors in this era because Indian economy boosted just only 5.9% in 2009-2000. On the other hand, the cor porate profit raised by 32%while the accumulated growth rate for industrial production during Apr-Dec 2009 was reported to be 6.2%. The rate of inflation in September 2008 was 8.8% while in 2009-2000 it has also jumped down to 2.9%. This research shows that long run financial factors such fluctuations in stock prices. Indias GDP in addition did not prove any hike in the past years. Not only India was affected with this situation but also other countries as well. The economists found some reasons to create a boost in Indian stock markets, they are: Information hike; IT impact; Internet fable; Feedback outcome; Cultural alteration. Another economist Sarkar, P. (2007) states that if there exists any significant correlation between growth and capital accretion, they have to use yearly information on numerous financial factors like, insignificant and actual share price, capital market turnover, companies which are stock market members, fixed stock structure and enlargement of actual GDP and production results. Despite, all the researchers tell the same thing from 2000-1951 till 2005, there are no correlation actual and capital market variables neither in short nor in long run. In addition, Sarkar also researched new movements and came to a conclusion that most of the financial variables are unstable and comprised of an upswing movement in mid 1970s. The tactics used in this thesis to get the best possible results is Unit Root tests. These tests are used to obtain a fixed and worthy degeneration analysis. Besides these studies, OLS and MLE approaches are also utilized for determining the sequence of auto-linkage of the remaining and handling with it. To estimate long-term and short-term relationships in a better manner, ECM and Autoregressive Distributed Lag (ADRL) respectively are used in this thesis. Shiller, R. (1990), an economist of University of Yale, had researched and tried to compare the normal meager compound Capital Price Index from 1871-2000. He concluded that the capital price instability is not compared by the profits. Second School of Thought In 2001, Black tried to elaborate the interlinkage between the U.S. capital costs and real economic variables. Black gathered 54 year periodical data and along with it used VAR model supported by hypothetical structure to study relationship between capital prices and macro financial variables. With the lime light on actual results and considering current value approach, Black found that the basic price-output ratio and the basic capital price in the light of various suppositions relating to time variation of income, and to contrast such values to the real data. Black studies 3 situations, in the first one, he initiated supposing that the individuals expect fixed return as being the wealth holder and then support this supposition by first, permitting the undisruptive rate to differ in due course and next the risk payment to be time changeable. Although there is a variation in models results, most mean that the capital market has comparatively been overestimated in comparison with its value expected from growth rates. According to reports, the ratio of stock market capitalization with GDP has boosted to be thrice as compared to last twenty five years in the US. From this figure, in mid 1970s less than 30% and in 1990s it was 80%. The point which is to be noted here is that it does not only seem that the capital market has risen in 1990s but its link with the actual finances has turned out to be well-built and due to which it got accredited. As per the records, capital market has been associated with actual financial variables by numerous tech niques, out of which one of them is asset costing perception in which Arbitrage Pricing Theory is second-hand as structure to analyze the impacts of actual economic measures on capital costs concentrating on the question that will the risk allied with a few real financial variables is replicated in probable asset takings. On the other hand, there also exists expenditure-CAPM study of expenditure which deliberates on a particular real factor power. There are other researches also conducted to analyze the relation between capital prices and investment when stock prices hide the actual economy which can be doled out with. In recent times, a lot of researches have aroused analyzing the mutual linkage between capital worth and actual financial factors with VAR models as the structure, devoid of any particular hypothetical formation. Bulmash (2003) has done a very distinctive analysis to elaborate the interaction between company investments and stock markets. He also studied that how investments affect stock markets and vice versa. This theory also reflects how investments respond faster than customers in capital markets. In his previous researches, Bulmash showed that what makes one capital market to get boosted just by the difference in returns of economies. And finally results in unity of this income fetch the stock into association in the long term. It has also been proved that what makes these stock markets covert into analysts of the future financial flows. It has also showed the linkage between capital investment markets and actual financial variables through a system that value of capital market will boost when: Firms increase their investment to enlarge their operations which will increase the GDP. With the increase in capital, actual capital also amplifies because buyers also raise their expenses which accelerate GDP. Such points will result in worth formation which will lead to real economy. Third School of Thought A renowned economist, Mustafa in 2007 has done an analysis on the linkage between capital market and actual financial market in Pakistan. For his study, he took a number of economic variables like, per capita GDP, productivity growth and capital market liquidity, volume of capital market highlighting the financial Market. He took up co-amalgamation and Error Correction Model method to set up the pragmatic link, if any among the two from 1980-2004. The probable outcomes points that the activities in the capital market of Pakistan elaborate the per capita GDP and productivity growth for small period only. On the other side, financial growth variables elaborates capital market factors in nearby as well as in long term which shows that the enlargement of capital market relies on by and large development of economy in Pakistan. The economy of Pakistan had not been affected by the acceleration in Karachi Stock Exchange which signifies that the elevated instability is not out of the ordinary of the up-and-coming stock markets. The previous theories related to this subject used stock prices as capital market movement sign and utilization, price rises, industrial output, financial flow, rate of interest as real financial factor. Mustafas theory is quite different from others work because the variables are different as used by others. The analyst have come to a conclusion on the basis of empirical results that in Pakistan the stock mark et is way behind and it needs to develop to be vital in the economy of Pakistan with the help of other financial institutions. In any nations economic growth, capital markets play an important role but capital market is inactive in the growth of a nation unless it is in its emergent stage. Another big name amongst economists is Hussain, F (2010). He also studied about the linkage among stock price and actual economy of Pakistan. He gathered data from 1959 till 2004 or 2005. After getting data, he distributed it in 2 halves, which are pre and post liberalization and with the help of this activity he analyzed the linkage between stock price and actual economy by applying different econometric tactics like ECM, Engle-Granger co- integrating regressions and Augmented Dickey Fuller (ADF) Unit Root tests. The delay period was decided in all the cases on the foundation of the two, i.e., Final Prediction Error and Akaike Information Criteria (AIC). By applying such techniques Hussain examined that there exists long term linkage between capital worth and actual financial factors. On the subject of the causal section, he has brought into being unilateral grounds from actual market to stock costs. This highlights that the stock markets in Pakistan are yet in a developing stage. They have not got developed to influence the actual variables of economy and because of that they cannot be considered as most important sign of the monetary activity. It means that Government of Pakistan can utilize actual sector to power the capital market. Another study observes that in India, the incorporation between Foreign Exchange and Stock market in liberalization period. The researchers tried their level best to find out the link flanked by Foreign Exchange and Stock market by using goods market approach and portfolio balance approach. To narrow the research, they have used a number of econometric techniques Grangers causality test in VAR structure, which is supported by F-Test to test this theory; and to examine such chains for immobility, ADF Unit Root Test is useful. One more econometric test is applied which is Gwekes Measures for the degree of business center amalgamation. But the point is that this study gave new outcomes which are totally different. The previous examinations reveal that there exists an informal linkage among income in foreign exchange and stock markets. While as per the final analysis, there is a high extent of assimilation among foreign exchange and capital markets and there is still two dimensional as w ell as simultaneous informal linkages between foreign exchange and stock markets. Figlewski (2001) Out of one of the many various kinds of papers written by Brenner, M., et al. (2010) have studied the nearby prevision and reaction of U.S. stocks, treasury bonds, and commercial bond places to the initial public announcement of major macroeconomic bulletin on employment, inflation, and interest rates. Four essential set of queries have been examined under this study. These are listed below: Whether these traded assets in the markets are more responsive to instability prior to release of these public announcements or less impulsive in nature afterwards? Are various asset class influenced in a different way by these public announcements? Is the prevailing degree of correlation between various assets being affected by these macroeconomic announcements? Do the influences of such public announcements occur solely due to their unanticipated mechanism or is the reaction happening in congruence to the predictable information? In response to the above stated queries, they have under taken a number of day to day, incessantly compounded surplus waiting-phase profits on the three major asset categories, namely; stocks, reserves bonds, and shared bonds. Koutsoyiannis (2004) What differentiates this research in contrast to the prior researches of its various types is the investigation of impact of major macroeconomic news on the cooperative allocation of returns in three different financial souks. Surveys and potential data have also been used to dig out the unforeseen mechanism of this information. Furthermore affect of these news bulletins on both the profits generated out of the three categories of assets, as well as their instability and connection is also a part of the analysis. To understand the flexibility of univariate GARCH model instead of containing the intricacy of the multivariate GARCH model, Dynamic Conditional Correlation (DCC) model by Engle (2002) has been taken under study. In view of this research they have come up to the conclusion that the information pertaining to the macroeconomic bulletins is considered to have a rather statistically momentous and economically considerable influence over the financial markets of US. Also this significant impact differs to a great extent across asset categories. Therefore it analyzes a multifaceted picture of interaction between the returns on asset in propinquity of public announcements or bulletins. In short a powerful correlation exists amid the actual economy and money markets of the U.S. With the help of a bivariate GARCH framework, Sarkar, A., et al. (2009), have been able to analyze whether the possibility of positive provisional relationship exists among capital profits and spending or not, even though the existence of absolute correlation is not evident in the case of G7 countries. A monthly statistics of approximately forty years have been considered for the United States and for other countries, quarterly data has been taken into consideration. They have witnessed strong evidence with respect to the existence of positive and considerable uncertain link among advancement in spending increase and capital profits. The hypothesis could not be verified and have been disregarded incase of 6 of the G7 countries as the correlation appears to be constant in nature for them. In relation to the above they have reached to a conclusion which proposes that the response of the policy incase when the stock markets performance is signifying better results than expected, may need to have a stronger policy than the usual. But when the market conditions turn out to be on the extreme that is either in a positive condition or a negative one, additional effects on the policy shouldnt have an impact by them.In this manner they have worked hard to establish a signifying linkage among capital market and actual economy and what effect does the capital market has on the actual economy. Another economist, Chauvet, M. (2009), has compiled his work upon establishing an active linkage among capital market variations and the trade cycle. It is of the believe that the movements in the stock market is being reflected by the various positions held up by the participants of the market on the basis of their assessment pertaining to the present condition of the economy. With the help of the on hand financial variables, in this thesis, the researcher has tried to explore the likelihood of envisaging the key rotating spots of the business series. A model has been proposed by Chauvet (2009) that facilitates in generating the predicted key rotating spots of the business series with the help of the trade cycle factor. It also assists in anticipating these predicted turning points pertaining to the trade cycle with the help of the stock market factor. The author; Chauvet, M. (2009) also suggests in this paper, an indicator of the stock market named as the stock market indicator (SM I). With the help of various series of financials, the stock market indicator (SMI) financially assists in the anticipation of essential rotating spots of the business series better in comparison to its individual components. This indicates that the SMI model is by far a better alternative to be used as a tool in anticipating the essential turning points of the trade cycle. Besides that, SMI can also be evaluated by the month end, which highlights the latest information for that particular month of the year. In contrast the CLI model only highlights information pertaining to the preceding month. Therefore the underlying structure suggested by Chauvet, M. (2009), is utilized to study and explore the characteristics of the stock market activities in predicting the trade cycles, particularly the beginning of the recession as a result of which it establishes a strong correlation and one way causal relationship between stock market and the real economy. Monthly data has been taken into c onsideration by the author from 1954-1994, in studying the economic and financial variables. The name of the economic variables used is: industrial production, manufacturing and trade sales from 1982, non-agricultural civilian employment, and the sum of individual income minus the transfer of payments from 1987. The author has taken into account a number of other variables for the stock market factor, these variables reveal general facts and figures pertaining to the current situation of the financial environment, for example; the amendments in the SP 500 PE ratio, surplus stock returns, 3-month Treasury bill rate and SP 500 dividend yield. A two state Markov process has to b followed by each of the factors discussed above. These factors depict various phases of the trade cycle. All of the factors are of the permission to change asynchronously in due course of time. Brenner, M., et al. (2010) throughout writing this paper have analyzed and examined the deep seated roots that are linked to the financial markets and the real economy. They have also examined the first public news pertaining to information of US macro economy to the short term anticipation and reaction of US stock, Treasury and Corporate Bond. The focus has been primarily placed upon studying the influence of these announcements on not just only on the different levels of those asset returns, but also upon the unpredictability and cooperative changes of those asset returns. The procedure of how the price arrangement takes place in relation to the macroeconomic news for the three major segments of the market that is stocks, government bonds and corporate bonds nad has also been explored by them. While carrying out the research on the underlying variables they have come across 4 important issues: In relation to the first release of the announcements, what impact would these announcements have on the asset returns and the volatility of these asset returns? Does the affect of these announcements differ in their impact in different ways for the various asset classes? Is the current degree of correlation that exists between different asset classes are significantly affected by this news? Is the reaction to the predicted information or the unexpected components of these news driving the impact created by these news releases? Having the flexibility of univariate GARCH model as opposed to the complex nature of the multivariate GARCH specifications, DCC Stock Market and Macroeconomic Variables in India Stock Market and Macroeconomic Variables in India Chapter I: INTRODUCTION Overview Investment is dependent on human behavior. Keynes (1936) elaborates which sort of behavior humans adopt while investing particularly in capital market. Usually people get in use with their â€Å"animal feelings† and â€Å"flock mentality†. Economic and social and political environment also affects the opinion of people and they force them to think several times before investing. This is the reason one cannot forget the fact that the value of economic activities and information nourished to the market is vital. Here we are going to discuss the tendency of animal spirit in India. The propensity of animal spirit in India is very much high-flying. The major reason for this is that only 2% of the population of India participates in such activities. The medium to get knowledge of market and accuracy in information is not available easily. This forces people to act as per their nature rather than their logic. The core theme of this analysis is the study of interrelation betwee n real economic variables and capital market variables. The significance of this relationship has got marvelous recognition in the past due to roller-coaster ride of the BSE. A few academics also claim that it is not greatly shored up by the financial basics. To determine the character of these basics in studying the stock prices, different people have done different researches. Amidst of these thoughts, some fundamentalists have tailored theory of Efficient Market Hypothesis (EMH). This theory was further extended by Fama in 1971 to narrow and categorize such business centers on the foundation of their response and data nourished to them in feeble, partially built and well-built markets. Another theory which is Popular Model Theory shows a different perspective in general. This theory explains the qualitative clarification of price which shows that most of the people proceed inappropriately to the information which they get and easily accessible information is not included in stock market price as Efficient Market Hypothesis verifies which is also much analogous to Keynes model. These days, everyone in the world is running after word money (finance). Nothing is possible without money and economy and other financial operations including growth of this whole world are also dependent on the same. Without finance, no one can turn the wheel of economy at 360 degree, because each and every transaction needs money at its core. Amadou (2007). In the past, there was a system in use, which is barter system. To avoid its complications, ‘money- component of finance was introduced and as then, money has been the most precious thing of the world. It has become a need for every individual to fulfill the requirements. Money is the core object needed to establish a business. The most valuable source of this sort of money is the post laissez-faireization period is stock markets. In todays world, each and every individual can witness the appearance and acceptance of the capital markets in the period of Globalization. This is considered to be highly regarded as an award f or the globalization years to under developed regions to enlarge and reinforce their nitty-gritty as their financial crisis is gratified to an extent by these stock markets. Capital markets are also considered to be a profitable platform for firms to get financing for their new or forthcoming projects and moreover for people as a prospect to invest with chances of risk but huge profits. The establishment of such capital market is the most important aspect for companies and individuals. It is also a valuable state of the prerequisite of economy on the degree required in a contemporary varied economy. The subsistence of such markets persuades the existence of such arguments shaped in the hoisting of money can be transmitted. Current Situation â€Å"Thus if the ‘animal spirits are dimmed and the spontaneous optimism falters, leaving us to depend on nothing but a mathematical expectation, enterprise will fade and die;-though fears of loss may have basis no more reasonable than hopes of profit had before. . . . . . . But individual initiative will be adequate only when reasonable calculation is supplemented and supported by animal spirits. . . . . . . .† Keynes (1936). In the above quote, Keynes (1936) has very bluntly and accurately explained the reasons undercover of the current situation along with the entire humankind is getting exaggerated in our day in 1936 merely in one of his leading models. A few economists have also accepted in an extremely enjoyable method which it is not the object that the worth of our productivity has decreased or lowered but just only the animal feelings are fainted and what we were expecting is that the value of our capital market has boosted is wrong in comparison with the primordial epoch and regard as added rise in actual value improbable. And every financial system requires such â€Å"animal spirits† or the positive behavior along with the estimated threats and reserves to became visible and outshine and development. Since her independence, India was following the socialistic outline for growth, but after the 1990s financial crisis, India had to make some strict financial improvements as proposed by World Bank. The most vital factors of that package were financial liberalization. This financial change cemented a new way for India to boost its economy and make developments and gave India impulsive environment to the financial markets specifically in language of BSE BSE which is supposed to be solitary of the major components of Indias fiscal hike. These days, capital markets has considered to be the most valuable source to transform domestic savings to upcoming productive projects and provides a chance to the country to develop. Brigham (2008) According to a survey conducted in India, around two percent of the general populace is directly caught up in capital markets but when anything happens to such financial markets, it is the whole population which get affected, which clearly shows the correlation, impact and importance of these capital institutions and actual economy not only on the ground intensity but also bottomless within the main rank. In these days, newspapers are bombarded with such sort of news and major newspapers also issue supplement for financial news. Due to such releases, there is a little doubt that the macroeconomic news which is vital to capital market will be affected. In recent years, the whole financial market of the world had crashed and with the recession in capital market, a gap has been established which lead to decrease real economic fundamentals. Consequently, it also boosts the value of this study because the focal point of this downturn is considered to be the capital markets and if we consider it the other way, a nation can become economically strong by considering such markets. So, it can easily be said by any person that it seems to be that the stock prices will go up and would result in the formation of some talented analysts of upcoming values of macroeconomic pointers similar to productivity growth and price increases. If one takes this thoughts then this would definitely result in arose of two more questions that what will make the market create hyper boom and incorporation of capital market with other marketplaces. Agrawal (2008) The most suitable reply to be given to the earliest query is that the flow of information rise which has crowded the market, for instance, media (commerce news channels). Another rebellion that shocked the market is Information Technology. The shortage of skilled people in IT in the US has also become highly required after stocks due to their fantastic dough take home power. The other question which is creating a fuss is regarding the connection of such capital markets with the actual financial system. Different analysts have also studied regarding this theory and worked on this linkage. Ando and Modigliani (1963) developed a theory called life cycle theory which is based on the linkage between stock prices and actual spending. The theory talks about the individuals decisions and states that people mark their expenditure verdicts on the conventional life span earning, division of which might be detained in capital connecting to capital cost variation to variation in using up expenditure. Beck Levine (2001 2008) In the same manner, the linkage between capital costs and investment spending is supported by q theory. The q theory is designed by James Tobin (1969) to analyze the effect of stock prices on investment spending, where q stand for fraction of total retail worth of comapnies to the substitute value of their on hand capital market at recent stock prices. In addition, we had also discussed EMH model. With this research we have concluded that none of these theories fit into the actual and recent image of stock markets. Some fit partially but no one is perfectly related. To analyze such issues, there should be more research to be done on this for better understanding and the below paragraph communicates it in an improved way. â€Å"We should not conclude from this that everything depends on the waves of irrational psychology. On the contrary, the state of long-term expectation is often steady, and, even when it is not, the other factors exert their compensating effects. We are merely reminding ourselves that human decisions affecting the future, whether personal or political or economic, cant depend on strict mathematical expectation, since the basis for making such calculation does not exist, and that it is not innate urge to activity which makes the wheels go round, our rational selves choosing between the alternatives as best we are able, calculating where we can, but often falling back for our motive on whim or sentiment or chance.† Keynes (1936). Structure of the Dissertation This study is stepped into five chapters and this is to be pointed that the register worth has been taken from all the factors. The first chapter thoroughly gives the overview of the current situation. The second chapter is based on the literatures related to our study. The third chapter comprises of a bunch of points and statistics and method considered in this analysis. The fourth chapter will explain the estimations and result analysis. Chapter five exemplifies the results, policy insinuations and boundaries of this analysis effort. Research Questions What is the relationship between stock market and macroeconomic variables in India? Is there an informal relationship between capital market and real economy? What is the influence of investment on financial health of India? CHAPTER II: LITERATURE REVIEW Introduction The word economics has emerged to be the most powerful word. Each and every individual is running after money and always try to earn as much as the one can within the shortest possible span. Without finance, no one can imagine running any sort of business and it has become an essential which runs the businesses and all the major features begin and finish at it. In recent world, the quickest and trouble-free way to earn money for new and challenging projects is to publicize or to enter into the stock markets where a little investment can make the wise firms accelerate and helps these firms to become giants amongst the other big names. Chauvet (2009) There are around two percent of the entire inhabitants in India which is caught up in stock markets but the whole population in India gets affected either directly or indirectly if anything good or bad occurs in such markets. This clearly shows that Capital Markets and Actual Economy both have strong and vital link on not just only the les ser stage but also on the higher stage. A number of studies and researches have been done in this regard but the outcomes are vague. The reason for this is that most of the researchers have found a tough bilateral linkage among capital markets and actual economy. On the other hand some researches have entirely rejected this analysis that stock markets and real economy are correlated. To study more deeply we can distribute numerous theories in 3 schools of thoughts on the ground of the literature review: first school of thought says that there is no linkage between capital market and real financial factors. The second school of thought has analyzed that there is an informal link among stock market and macro economic variable. The last one which is third school of thought promulgates an unclear belief that there is a relation between the two but not positively in both short and long run. Pindyck (2004) This research is comprised of some on hand literature which has been reviewed relating to the above problems. Below we have discussed the overall findings of different researchers. First School of Thought Chowhan, P.K. et al. (2000) The first school of thought attempted to obtain reasons for hurly-burly in capital market in small period in India considering BSE as the major indicator. In the period from 2008-2000, capital markets in India had shown irregular and unstable activities which does not go with the information provided to them. Due to the severe up and down in the stock prices, the investor confidence resulted in turmoil in the markets. The school of thought tried to explain that what could be the actual causes at the back of instability and what made Efficient Market Hypothesis (EMH) by Fama cant explain the reason. The researchers attempted to find out the reason of such huge rise in BSE stock value. On October 2008, BSE was at 2761 and in February 2000 it went at 6000, which shows 117% appraisal in just 15 months, which is not powerfully maintained by basic financial factors in this era because Indian economy boosted just only 5.9% in 2009-2000. On the other hand, the cor porate profit raised by 32%while the accumulated growth rate for industrial production during Apr-Dec 2009 was reported to be 6.2%. The rate of inflation in September 2008 was 8.8% while in 2009-2000 it has also jumped down to 2.9%. This research shows that long run financial factors such fluctuations in stock prices. Indias GDP in addition did not prove any hike in the past years. Not only India was affected with this situation but also other countries as well. The economists found some reasons to create a boost in Indian stock markets, they are: Information hike; IT impact; Internet fable; Feedback outcome; Cultural alteration. Another economist Sarkar, P. (2007) states that if there exists any significant correlation between growth and capital accretion, they have to use yearly information on numerous financial factors like, insignificant and actual share price, capital market turnover, companies which are stock market members, fixed stock structure and enlargement of actual GDP and production results. Despite, all the researchers tell the same thing from 2000-1951 till 2005, there are no correlation actual and capital market variables neither in short nor in long run. In addition, Sarkar also researched new movements and came to a conclusion that most of the financial variables are unstable and comprised of an upswing movement in mid 1970s. The tactics used in this thesis to get the best possible results is Unit Root tests. These tests are used to obtain a fixed and worthy degeneration analysis. Besides these studies, OLS and MLE approaches are also utilized for determining the sequence of auto-linkage of the remaining and handling with it. To estimate long-term and short-term relationships in a better manner, ECM and Autoregressive Distributed Lag (ADRL) respectively are used in this thesis. Shiller, R. (1990), an economist of University of Yale, had researched and tried to compare the normal meager compound Capital Price Index from 1871-2000. He concluded that the capital price instability is not compared by the profits. Second School of Thought In 2001, Black tried to elaborate the interlinkage between the U.S. capital costs and real economic variables. Black gathered 54 year periodical data and along with it used VAR model supported by hypothetical structure to study relationship between capital prices and macro financial variables. With the lime light on actual results and considering current value approach, Black found that the basic price-output ratio and the basic capital price in the light of various suppositions relating to time variation of income, and to contrast such values to the real data. Black studies 3 situations, in the first one, he initiated supposing that the individuals expect fixed return as being the wealth holder and then support this supposition by first, permitting the undisruptive rate to differ in due course and next the risk payment to be time changeable. Although there is a variation in models results, most mean that the capital market has comparatively been overestimated in comparison with its value expected from growth rates. According to reports, the ratio of stock market capitalization with GDP has boosted to be thrice as compared to last twenty five years in the US. From this figure, in mid 1970s less than 30% and in 1990s it was 80%. The point which is to be noted here is that it does not only seem that the capital market has risen in 1990s but its link with the actual finances has turned out to be well-built and due to which it got accredited. As per the records, capital market has been associated with actual financial variables by numerous tech niques, out of which one of them is asset costing perception in which Arbitrage Pricing Theory is second-hand as structure to analyze the impacts of actual economic measures on capital costs concentrating on the question that will the risk allied with a few real financial variables is replicated in probable asset takings. On the other hand, there also exists expenditure-CAPM study of expenditure which deliberates on a particular real factor power. There are other researches also conducted to analyze the relation between capital prices and investment when stock prices hide the actual economy which can be doled out with. In recent times, a lot of researches have aroused analyzing the mutual linkage between capital worth and actual financial factors with VAR models as the structure, devoid of any particular hypothetical formation. Bulmash (2003) has done a very distinctive analysis to elaborate the interaction between company investments and stock markets. He also studied that how investments affect stock markets and vice versa. This theory also reflects how investments respond faster than customers in capital markets. In his previous researches, Bulmash showed that what makes one capital market to get boosted just by the difference in returns of economies. And finally results in unity of this income fetch the stock into association in the long term. It has also been proved that what makes these stock markets covert into analysts of the future financial flows. It has also showed the linkage between capital investment markets and actual financial variables through a system that value of capital market will boost when: Firms increase their investment to enlarge their operations which will increase the GDP. With the increase in capital, actual capital also amplifies because buyers also raise their expenses which accelerate GDP. Such points will result in worth formation which will lead to real economy. Third School of Thought A renowned economist, Mustafa in 2007 has done an analysis on the linkage between capital market and actual financial market in Pakistan. For his study, he took a number of economic variables like, per capita GDP, productivity growth and capital market liquidity, volume of capital market highlighting the financial Market. He took up co-amalgamation and Error Correction Model method to set up the pragmatic link, if any among the two from 1980-2004. The probable outcomes points that the activities in the capital market of Pakistan elaborate the per capita GDP and productivity growth for small period only. On the other side, financial growth variables elaborates capital market factors in nearby as well as in long term which shows that the enlargement of capital market relies on by and large development of economy in Pakistan. The economy of Pakistan had not been affected by the acceleration in Karachi Stock Exchange which signifies that the elevated instability is not out of the ordinary of the up-and-coming stock markets. The previous theories related to this subject used stock prices as capital market movement sign and utilization, price rises, industrial output, financial flow, rate of interest as real financial factor. Mustafas theory is quite different from others work because the variables are different as used by others. The analyst have come to a conclusion on the basis of empirical results that in Pakistan the stock mark et is way behind and it needs to develop to be vital in the economy of Pakistan with the help of other financial institutions. In any nations economic growth, capital markets play an important role but capital market is inactive in the growth of a nation unless it is in its emergent stage. Another big name amongst economists is Hussain, F (2010). He also studied about the linkage among stock price and actual economy of Pakistan. He gathered data from 1959 till 2004 or 2005. After getting data, he distributed it in 2 halves, which are pre and post liberalization and with the help of this activity he analyzed the linkage between stock price and actual economy by applying different econometric tactics like ECM, Engle-Granger co- integrating regressions and Augmented Dickey Fuller (ADF) Unit Root tests. The delay period was decided in all the cases on the foundation of the two, i.e., Final Prediction Error and Akaike Information Criteria (AIC). By applying such techniques Hussain examined that there exists long term linkage between capital worth and actual financial factors. On the subject of the causal section, he has brought into being unilateral grounds from actual market to stock costs. This highlights that the stock markets in Pakistan are yet in a developing stage. They have not got developed to influence the actual variables of economy and because of that they cannot be considered as most important sign of the monetary activity. It means that Government of Pakistan can utilize actual sector to power the capital market. Another study observes that in India, the incorporation between Foreign Exchange and Stock market in liberalization period. The researchers tried their level best to find out the link flanked by Foreign Exchange and Stock market by using goods market approach and portfolio balance approach. To narrow the research, they have used a number of econometric techniques Grangers causality test in VAR structure, which is supported by F-Test to test this theory; and to examine such chains for immobility, ADF Unit Root Test is useful. One more econometric test is applied which is Gwekes Measures for the degree of business center amalgamation. But the point is that this study gave new outcomes which are totally different. The previous examinations reveal that there exists an informal linkage among income in foreign exchange and stock markets. While as per the final analysis, there is a high extent of assimilation among foreign exchange and capital markets and there is still two dimensional as w ell as simultaneous informal linkages between foreign exchange and stock markets. Figlewski (2001) Out of one of the many various kinds of papers written by Brenner, M., et al. (2010) have studied the nearby prevision and reaction of U.S. stocks, treasury bonds, and commercial bond places to the initial public announcement of major macroeconomic bulletin on employment, inflation, and interest rates. Four essential set of queries have been examined under this study. These are listed below: Whether these traded assets in the markets are more responsive to instability prior to release of these public announcements or less impulsive in nature afterwards? Are various asset class influenced in a different way by these public announcements? Is the prevailing degree of correlation between various assets being affected by these macroeconomic announcements? Do the influences of such public announcements occur solely due to their unanticipated mechanism or is the reaction happening in congruence to the predictable information? In response to the above stated queries, they have under taken a number of day to day, incessantly compounded surplus waiting-phase profits on the three major asset categories, namely; stocks, reserves bonds, and shared bonds. Koutsoyiannis (2004) What differentiates this research in contrast to the prior researches of its various types is the investigation of impact of major macroeconomic news on the cooperative allocation of returns in three different financial souks. Surveys and potential data have also been used to dig out the unforeseen mechanism of this information. Furthermore affect of these news bulletins on both the profits generated out of the three categories of assets, as well as their instability and connection is also a part of the analysis. To understand the flexibility of univariate GARCH model instead of containing the intricacy of the multivariate GARCH model, Dynamic Conditional Correlation (DCC) model by Engle (2002) has been taken under study. In view of this research they have come up to the conclusion that the information pertaining to the macroeconomic bulletins is considered to have a rather statistically momentous and economically considerable influence over the financial markets of US. Also this significant impact differs to a great extent across asset categories. Therefore it analyzes a multifaceted picture of interaction between the returns on asset in propinquity of public announcements or bulletins. In short a powerful correlation exists amid the actual economy and money markets of the U.S. With the help of a bivariate GARCH framework, Sarkar, A., et al. (2009), have been able to analyze whether the possibility of positive provisional relationship exists among capital profits and spending or not, even though the existence of absolute correlation is not evident in the case of G7 countries. A monthly statistics of approximately forty years have been considered for the United States and for other countries, quarterly data has been taken into consideration. They have witnessed strong evidence with respect to the existence of positive and considerable uncertain link among advancement in spending increase and capital profits. The hypothesis could not be verified and have been disregarded incase of 6 of the G7 countries as the correlation appears to be constant in nature for them. In relation to the above they have reached to a conclusion which proposes that the response of the policy incase when the stock markets performance is signifying better results than expected, may need to have a stronger policy than the usual. But when the market conditions turn out to be on the extreme that is either in a positive condition or a negative one, additional effects on the policy shouldnt have an impact by them.In this manner they have worked hard to establish a signifying linkage among capital market and actual economy and what effect does the capital market has on the actual economy. Another economist, Chauvet, M. (2009), has compiled his work upon establishing an active linkage among capital market variations and the trade cycle. It is of the believe that the movements in the stock market is being reflected by the various positions held up by the participants of the market on the basis of their assessment pertaining to the present condition of the economy. With the help of the on hand financial variables, in this thesis, the researcher has tried to explore the likelihood of envisaging the key rotating spots of the business series. A model has been proposed by Chauvet (2009) that facilitates in generating the predicted key rotating spots of the business series with the help of the trade cycle factor. It also assists in anticipating these predicted turning points pertaining to the trade cycle with the help of the stock market factor. The author; Chauvet, M. (2009) also suggests in this paper, an indicator of the stock market named as the stock market indicator (SM I). With the help of various series of financials, the stock market indicator (SMI) financially assists in the anticipation of essential rotating spots of the business series better in comparison to its individual components. This indicates that the SMI model is by far a better alternative to be used as a tool in anticipating the essential turning points of the trade cycle. Besides that, SMI can also be evaluated by the month end, which highlights the latest information for that particular month of the year. In contrast the CLI model only highlights information pertaining to the preceding month. Therefore the underlying structure suggested by Chauvet, M. (2009), is utilized to study and explore the characteristics of the stock market activities in predicting the trade cycles, particularly the beginning of the recession as a result of which it establishes a strong correlation and one way causal relationship between stock market and the real economy. Monthly data has been taken into c onsideration by the author from 1954-1994, in studying the economic and financial variables. The name of the economic variables used is: industrial production, manufacturing and trade sales from 1982, non-agricultural civilian employment, and the sum of individual income minus the transfer of payments from 1987. The author has taken into account a number of other variables for the stock market factor, these variables reveal general facts and figures pertaining to the current situation of the financial environment, for example; the amendments in the SP 500 PE ratio, surplus stock returns, 3-month Treasury bill rate and SP 500 dividend yield. A two state Markov process has to b followed by each of the factors discussed above. These factors depict various phases of the trade cycle. All of the factors are of the permission to change asynchronously in due course of time. Brenner, M., et al. (2010) throughout writing this paper have analyzed and examined the deep seated roots that are linked to the financial markets and the real economy. They have also examined the first public news pertaining to information of US macro economy to the short term anticipation and reaction of US stock, Treasury and Corporate Bond. The focus has been primarily placed upon studying the influence of these announcements on not just only on the different levels of those asset returns, but also upon the unpredictability and cooperative changes of those asset returns. The procedure of how the price arrangement takes place in relation to the macroeconomic news for the three major segments of the market that is stocks, government bonds and corporate bonds nad has also been explored by them. While carrying out the research on the underlying variables they have come across 4 important issues: In relation to the first release of the announcements, what impact would these announcements have on the asset returns and the volatility of these asset returns? Does the affect of these announcements differ in their impact in different ways for the various asset classes? Is the current degree of correlation that exists between different asset classes are significantly affected by this news? Is the reaction to the predicted information or the unexpected components of these news driving the impact created by these news releases? Having the flexibility of univariate GARCH model as opposed to the complex nature of the multivariate GARCH specifications, DCC