African Americans in American Films Essay

African Americans in American Films Introduction                   Following the violent racism prevalent at the beginning of the turn of the twentieth century, African American cultural elites, struggling to articulate a positive identity for the black, developed a middle-class ideology of racial uplift. Insisting that they were truly the representative of the race’s potential, black elites espoused an ethos of service and self-help to the black masses and distinguished themselves from the black majority as the agents of civilization; hence they referred to it as the ‘uplifting the race.’ A central assumption of racial uplift ideology was that African Americans’ moral progress and material would diminish the white racism.                   The ‘uplift’ of the black community referred to the struggle of African Americans living in the 19th and early 20th century to forge and maintain positive identity in the U.S. society that reduced their existence to that singularly alienating phrase â€Å"the Negro problem.† This is very demining and that’s why they had to fight. What historians refer to as racial uplift ideology describes a prominent response of black middle-class spokespersons, leaders and activists to the crisis marked by the assault on the political and civil rights of African Americans primarily in the united states’ South from roughly the 1880s to 1914. A generation earlier, the end of slavery and emancipation had fueled African Americans’ optimistic pursuit of education, economic independence and full citizenship, all crucial markers of freedom.                   Advocates of African American political and civil rights fought a lonely and tough struggle with few allies in a national climate of anti-black racism. White southern politicians and elite opinion leaders defended white supremacy and proclaimed the mental, moral and physical depravity and inferiority of blacks from the pulpit, press and university. The consensus was that blacks were unfit for citizenship of the U.S., and that neo- slavery, or the plantation slavery of menial labor and sharecropping, was the natural state of black people and that is where they belong. Guided by southern apologists for lynching, many whites, regardless of education or income, viewed the aspirations of black men and women through the warped lens of crude racial and sexual stereotypes that accused all blacks of immorality and criminality.                   Given the occurrence of such frightening representations of shades of black, Africa America management and community spokespersons, a growing, but portion of the whole Africa America population, were under constant pressure to defend the picture and honor of dark men and ladies. Black management in the North were much freer to engage in governmental demonstration and condemn national oppression in stronger conditions than those management in the southern part of, where governmental outspokenness could outcome in lynching or permanent exile. Obviously, then, dark management differed on strategies for dealing with â€Å"the Negro issue.† So-called â€Å"radicals† endorsed demonstration and frustration against lynching and disfranchisement, challenging complete citizenship rights; traditional management recommended accommodation, self-help, and the desire of property-ownership. The issue of what type to train and learning was best suited for s hades of black was a super rod of argument. Some management, in the southern part of the U.S., preferred commercial knowledge, which highlighted manual training for farming and skilled jobs. Other dark management reinforced college for Africa Individuals, to ensure the development of a management and professional category. With opportunities for knowledge of any type restricted by the white-colored South’s anger, and with the preference of northern white-controlled philanthropy for commercial knowledge, what were basically complementary forms to train and learning became a source of intense issue.                   Despite these governmental variations, dark management generally countered anti-black generalizations by focusing category variations among shades of black, and their essential role as competition management. From their perspective, to â€Å"uplift the race† featuring their function as elites to change the character and manage the behavior of the dark community. Against persistent statements of dark immorality and pathology, knowledgeable shades of black battled a battle over the representation of their people, a strategy with uncertain effects and results. They knew as themselves as a â€Å"better class† of shades of black, and required identification of their respectability, and blessed position as providers of European improvement and society. But in doing so, they brought in a state policies of internal category department (See also panel 53 in Edward Lawrence’s The Migration of the Negro.) that often seemed to internalize popula r thoughts of dark social depravity and backwardness even as they desired to battle racial discrimination. In other words, this method of opposing racial discrimination tacitly echoed popular ideas of category and sex structure. Their view that community improvement for shades of black was preferably calculated in patriarchal conditions of male-headed families and homes created stress between knowledgeable men and ladies. Such objectives of women deference to men authority and management were challenged by many knowledgeable dark females, such as Old – Julia Cooper and the anti-lynching capitalist and reporter, Ida B. Bore holes.                   This version of national uplift philosophy as an anti-racist argument employed by knowledgeable shades of black is best understood as a complicated, varied and sometimes defective reaction to a situation in which the range of governmental options for Africa America management was restricted by the aggressive and persistent racial discrimination of the post-Reconstruction U. S. Declares. By reinforcing their respectability through the moralistic over stated claims of â€Å"uplifting the competition,† and suggesting the ethical guidance of the dark community, Africa America middle-class management and spokespersons were marginalizing the idea of uplift in its more democratic and inclusive sense of combined community progression and requirements for equivalent privileges. Many dark spokespersons desired to resolve this tension between personal and team position by insisting that personal success helped the whole competition. However, many Africa Amer ica men and ladies considered the over stated claims of uplift as a call to community support. They introduced values of self-help and support to the team in building educational, reformist community gospel chapels, social and fraternal organizations, settlement houses, magazines, trade labor unions, and other community institutions whose beneficial community impact surpassed the ideological limitations of uplift.                   In the last decade, movie students have focused an increasing amount of crucial attention on Oscar Micheaux’s 1920 silent movie Within Our Gateways as an essential Africa America reaction to D. W. Griffith’s infamously improper movie, The Beginning of a Country (1915). Oscar Micheaux’s milestone movie offered a rebuttal to Griffith’s interpretation of dark assault and crime with a story of the injustices faced by Africa Individuals in a improper community. While Griffith’s movie symbolizes dark men attacks on white-colored women cleanliness, Micheaux’s movie sets the historical record straight with its interpretation of the attempted sexual attack of a dark woman by a white-colored man. But the national reversals in the plot of the movie are not the only difficulties that Within Our Gateways presents to Griffith’s movie.                   Within Our Gateways also surfaces The Beginning of a Country in the state policies of its appearance, specifically in its very different use of similar modifying. Griffith’s movie uses crosscutting to existing a very simple resistance between white-colored virtue and dark villainy; in contrast, Micheaux’s movie uses a complicated modifying pattern to existing a larger community vision of many different, competing governmental roles within both white-colored and Africa America community. The complicated design of Micheaux’s modifying is efficient in making up a viewer who is more politically crucial than the viewer constructed by the traditional The show biz industry design of Griffith’s movie. Series in Micheaux’s movie crosscut among five or six different locations and twice as many characters; consequently, Micheaux’s movie requirements an engaged and innovative viewer to identify inconsistent and contrary comm unity and governmental statements about the power structure of competition relations in the U. s. Declares.                   The Negro Knight is a 1944 documented created by the U. s. Declares Military during World War II.[1] The movie was created by Honest Capra as a follow up to his successful movie series Why We Fight. The army used this movie as a means of propaganda to persuade Africa Individuals to solicit in the army and battle in the war. A lot of people regarded the movie very highly, some going as far to say that The Negro Knight was â€Å"one of the finest factors that ever happened to America†.[2] Due to both high reviews and great cinematography, The Negro Knight proved to be a large movie that affected army members and citizens of all competitions.                   The Negro Knight affected later Africa America movies and its viewers in different ways. The movie performed a considerable part in changing the types of roles that Africa Individuals received in following movies. For example, instead of showing shades of black only as slaves or sub servants, this movie showed Africa Individuals as lawyers, artists, athletes, and other valued careers. In different movies during this time frame, Africa Individuals were often represented as comical figures. However, after The Negro Knight, Africa Individuals performed more decent and popular roles in movies.                   Furthermore, people came to realize how essential and significant a tool, movies were for telecommuting saves gas. Messages within movies, if indicated the correct way, could influence viewers greatly. The message within The Negro Knight hard the notion and offered visual proof those national equal rights was a validated idea and should be approved. Africa Individuals around the country were very pleased with this movie.                   In both movies, the meaning of uplift was extremely competitive even among those who shared it is designed. Ultimately, top level ideas of the philosophy retreated from more democratic thoughts of uplift as community progression, leaving a heritage that becomes smaller the Americans’ ideas of privileges, citizenship, and community justice. One of the significant limits of national uplift philosophy was that the attempt to restore the picture of dark people through category differences trafficked in statements of national and sex structure. The appeal implied in national uplift philosophy for the identification of dark elites’ capacity for citizenship had overshadowed post-emancipation justifications by shades of black and white wines that posited inalienable privileges as the foundation for dark men citizenship, financial privileges, equivalent protection, and team power.                   The dark top level made uplift the foundation for a racial top level identification declaring Negro improvement through category stratification as competition improvement, which required an associated idea of bourgeois certification for bigger roles in the movie industry, among other factors. Elites basically approved the conditions of the debate, recognizing that some are more deserving than others are. Instead of competition, though, they suggested that it was acculturation and display of western culture and knowledge. References Capra, F., Moss, C., United States., & United States. (1994).  The Negro soldier. Hollywood, CA: Craven Home Video. Hitchcock, A., Macgowan, K., Swerling, J., Steinbeck, J., Bankhead, T., Bendix, W. Slezak, W. Twentieth Century Fox Home Entertainment, Inc. (2005).  Lifeboat. Beverly Hills, Calif: 20th Century Fox Home Entertainment. Micheaux, O. (1994).  The conquest: The story of a Negro pioneer. Lincoln: University of Nebraska Press. Micheaux, O., Thomas, P. A., Cram, B., Bowser, P., Taylor, C., Johnson, B., Northern Light Productions. PBS Video. (1994).  Midnight ramble: Oscar Micheaux and the story of race movies. Alexandria, VA: PBS Video. Source document

Review Literary Terms Essay

Imagination is the power to create. It is the key component to literature. Without imagination, there won’t be an interesting story, I believe. Imagination is not only important to the writer, it helps the reader broaden their interpretation of the story. â€Å"When you allow reading to unlock your imagination, your connection sets the stage for intellectual engagement. It allows the experience of reading literature to include the pursuit of ideas and knowledge.† (Clugston, R.W 2010). With imagination comes genre. Choosing what category or type of literature. It can be a short story, poem, or drama. â€Å"It can be used to make broad distinctions or to identify specific categories within a broad category. The short story and the novel, for example, are specific literary genres within the broad category of fiction.†(Clugston, R.W.2010). I think another very important component to literature is the tone. Setting the tone will let the reader know what attitude the literary work is going. For example, â€Å"the final lines in Updike’s poem create an initial feeling of sympathy, which is likely to become empathy if the reader reflects on the dog’s predicament in not being able to communicate its final struggle.† (Clugston, R.W 2010). Tone is followed by image. Image represents the experience that go through your senses, the idea. Writers use specific language to describe the imagery. Again, in Frost’s and Updike’s poems about the dog, â€Å"In Frost’s image of an old dog there’s an initial feeling of sadness, but if the reader reflects on what the poem has to say about the inevitable life cycle that both the dog and the speaker face, sadness is likely to fade somewhat into acceptance.† Reference Clugston, R. W. (2010). Journey into literature. San Diego, California: Bridgepoint Education, Inc.

Social Problems - Hotel Rwanda-indenify a social problem within the Essay

Social Problems - Hotel Rwanda-indenify a social problem within the movie - Essay Example century, and eventually the tension was so great that a full-fledged civil war broke out in 1994 and resulted in the deaths of almost a million people. Foreign aid was sent in to calm the situation, but a lack of crucial support meant that both the Hutu and the Tutsi people were forced to hide as refugees wherever they could find shelter from the rampaging armies. Hotel Rwanda is a movie that tells the true story of one man who lived through the war and realized that he could only rely on himself to save his own life and the lives of many other refugees. The movie takes place in the Rwandan capital of Kigali in 1994, just as the serious violence between the Hutus and Tutsis breaks out. The main character, Paul Rusesabagina, was the manager of the HÃ ´tel des Mille Collines in Kigali. Mille Collines means ‘thousand hills’ in French, the language of Rwanda’s Belgian colonizers, and the phrase is used as a direct reference to Rwanda itself – the land of a thousand hills. The movie is a very accurate depiction of the Rwandan conflict in 1994, and during the course of the film Paul Rusesabagina finds himself in an awkward position as a Hutu who doesn’t believe in politics or violence against the Tutsi. He first claims responsibility solely over himself and his family, but soon realizes that he is the only person who can save the lives of hundreds of families and children of both Tutsi and Hutu tribes who are being persecuted by armies on either side. His hotel becomes a place of refuge for over 1200 peo ple, and the only way to keep the ‘guests’ from being killed by the armies is to pretend that it is being run as usual for high-class, European paying guests. Paul does his best to keep the hotel running – he bribes military leaders with unlimited beer and scotch so that they will guard the gates of the establishment and keep the gun-wielding Hutu army and Tutsi rebels out of the building. At the outbreak of the conflict, UN forces are sent in and

Arm Crank Ergometry Assignment Example | Topics and Well Written Essays - 2000 words

Arm Crank Ergometry - Assignment Example Previous studies have considered issues linked to exercise efficiency. This line of enquiry provides important information associated with the relationship between the energy required to achieve a given amount of external work. In the context of a competitive athlete or a patient in a clinical setting, exercise efficiency provides a useful insight into functional capacity. When presented in either gross or net terms, exercise efficiency has been shown to increase in line with workload during both cycling and ACE. Several studies have also demonstrated there to be a clear interaction between crank rate and workload with respect to oxygen consumption during cycling and ACE. Additionally, previous studies have considered exercise efficiency in a number of different ways, including the calculation of gross, net, and delta values. Powers et al. (1984) showed that VO2 during ACE increased in line with crank rate. At workloads of 15 and 30W, VO2 was lower and exercise efficiency was higher, using crank rate of 50 and 70 rev.min-1 compared to 90 rev.min-1. Furthermore, when the workloads were increased to 45 and 60W, exercise efficiency remained higher using 50 compared to 90 rev.min-1. ... Furthermore Smith et al. showed that while variations in crank rate (50, 70 and 90 rev.min-1) influenced measures of exercise efficiency a relatively low workloads (30 to 70w) during ACE, these discrepancies did not exist at 90w. These data are interesting as they question the previously reported interaction between crank rate, workload and exercise efficiency. The purpose of this practical will be to further investigate 1) if exercise efficiency parameters change in line with variations in crank rate and 2) to determine whether or mechanical efficiency varies according to the external workload being achieved. In these respects, values of gross, net and work efficiency will be considered. RESULTS. The results of the experiment are summarised in the table 1 in the Annex. You can see that the index FE02 (fractional concentration of oxygen in expired air) was varied in the range between 16.2 and 18.5 ml O2/kg/min (range is 2.3 ml O2/kg/min). Consequently the mean of 35 measurements was equal to 17.1 and its standard error is 0.09. The variance of FE02 gross value was 0.34 and standard deviation - 0.56. The distribution of the sample was asymmetric and not normal (skewness is 0.72 and kurtosis 0.29). The values of median, lower and upper quartile were equal to 17.0, 16.7 and 17.4 correspondingly. The mean value of FECO2 (fractional concentration of CO2-exhaled) was equal to 3.660.08 while the variance and standard deviation was 0.24 and 0.49 respectively. The median of the index was 3.73 and the first (lowest) and third (upper) quartiles were equal to 3.45 and 3.98 while the minimum and maximum were 2.52 and 4.44 (range is 1.92 ml CO2/kg/min). The skewness and kurtosis were not equal to zero thus the distribution was not symmetric. The data

W.E.B. DuBois life and role in the history of education Essay

W.E.B. DuBois life and role in the history of education - Essay Example William Edward Burghardt Du Bois was an influential African American intellectual leader in the United States, who lived between 1868 and 1963.As a sociologist, historian, civil right activist, Pan-Africanist, author, editor and educator, W.E.B. Du Bois explored scholarship, integration, national self determination, human rights, cultural and economic separatism, politics, third world solidarity, expatriation and international communism as possible solutions to the issue of racism that was prevalent in the twentieth century America society in which he lived (Lewis, 2001). W.E.B. Du Bois emerged in the limelight through his opposition to Booker T. Washington alleged idea of accommodation as a solution to the problems affecting the African-American population (Calhoun et al., 2009). In place of the idea of accommodation, W.E.B. Du Bois advocated increased political participation of African Americans to ensure civil rights and challenged African-Americans to achieved greater successes i n their endeavors and become exceptional leaders in their communities to ensure progress of the African-American race. Indeed, W.E.B Du Bois suggested that African-Americans should focus on obtaining higher education in the liberal arts as this will equip them to negotiate and change a society that is dominated by racism, hate and prejudice (Alridge 2008). As a mixed-race son of a lone impoverished mother, W.E.B. Du Bois faced challenges that shaped his educational ideology. He worked after-school to support himself and his mother, who could not work as a result of stroke. His childhood experiences and those at school; in addition to the relationships he forged while at schools nourished his ideology that education provides the means through which African American can advance their socio-economic standing. Life of W.E.B. Du Bois: events that shape his thoughts W.E.B. Du Bois was born on February 23, 1868, in Great Barrington, Massachusetts, to Alfred Du Bois and Mary Silvina Burghar dt Du Bois (Alridge, 2008). Great Barrington, where W.E.B. Du Bois grew up, was a predominantly Anglo-American settlement. His maternal family was part of the relatively very small black population in Great Barrington while his father, who was of a mixed race – French Huguenot and African – was from Haiti (Wolters, 2003). Before W.E.B. Du Bois was two years old, his father deserted the family. While still young, Du Bois’ mother suffered stroke that rendered her incapable of working. Thus, the family relied on charity from family members and the income from W.E.B. Du Bois after-school work. The predominantly white population of Great Barrington notwithstanding, Du Bois never felt separated while at school (Du Bois, 1903). In fact, some neighborhood whites rented Du Bois and his mother a house in Great Barrington (Du Bois, 1903). However, a certain experience during a game of â€Å"calling cards† when a white girl refused to accept his card on the basis of his skin color, led him to the realization that racism is ingrained in the thinking and life of some people in the American society (Du Bois, 1903). As a young boy working to support his incapacitated mother and himself, he realized early in life that education holds the key to the door of economic and social emancipation and betterment of not only his family but that of other African-Americans. His successes in his academic pursuit confirmed his belief and also equipped him in his quest for the empowerment of African Americans. Encouraged by his teachers, who recognized his intellectual potentials, he majored in classical courses in high school (Du Bois, 1903). He attended Fisk University, Harvard University and University of Berlin. His study stay at Berlin led to his intellectual maturation as he was opportune to study under German prominent social scientists. He also travelled extensively throughout Europe during his study at Berlin. These experiences and relationships nourished and shaped W.E.B. Du

Book response Essay Example | Topics and Well Written Essays - 1250 words

Book response - Essay Example The poems are easy and full of affective yearning, with which any reader can identify. Further, Dickman’s theme oriented composition makes it interesting for readers to discern crucial life lessons and get inspired to make amends where necessary. One predominant theme in All American Poem is â€Å"scraping for joy†, which this essay seeks to explore in greater detail. The first poem in Dickman’s collection, which explicitly addresses the theme of scraping for joy, is Slow Dance. The basic meaning of this phrase is that, people must strive to derive joy from every action they take or every experience they go through. Just like the poem title suggests, life should be a slow dance, where one soaks in every moment of happiness and avoids taking for granted the joyous aspects of life, however meager. Dickman’s poem is infused with a sense of pleasure and expectation, as one skims through the verse line by line. There is a promise of hope even in the most unexciting or demoralizing everyday activities. The poem is also emphatic on the need to eagerly grasp the relatively few moments of slow dancing with exquisite unfamiliar persons. Such acts in essence, constitute cheating life or coping with aspects of life that might seem too difficult or painful to handle. Dickman’s detailed description of ritual of slow dancing gives one, as a reader, insight into the need to live life easy and take in all the little joys. By drawing a reader’s attention to the purported mundane moments of life, and comparing these with the happy times people would enjoy if only they took the time, the poet is successfully convincing on the issue of scraping for joy. For instance, he points out mowing the lawn, making another person suffer, suffering from insomnia and even dying, as some of the negativities of life. The poet establishes juxtaposition of these negative aspects of life, with positive ones like the hope of an almond grove in pitch darkness,

Strategic management Case Study Example | Topics and Well Written Essays - 500 words - 4

Strategic management - Case Study Example Thirdly the financial strategy is also responsible for impressive performance. Due to the image created the company’s profits have risen drastically as well as stock prices which presents the company with a solid capital base. The location strategy is another strength at Starbucks that helps fuel the superior financial performance. The company’s sophisticated strategy of location informed by a thorough analysis of demographics has seen expand to prime locations locking out competition. In some instances even Starbucks’s stores are located on opposite ends of busy streets to get hold of the traffic going in either direction of the streets. A key resource at Starbucks is the people; on the background that employees who are motivated offer good service to customers, training is emphasized. They are also given a compensation package and benefits that are better compared to the industry averages. The company also owns its stores and sells its own coffee roasted in-house. Through careful analysis of demographics they are able to identify and locate their stores in prime areas locking competition. Through extensive training and emphasis on selling more than the coffee the company has developed a key competence of providing top class customer services through motivated employees. The company is also capable if attracting a lot of repeat customers with customers visiting the stores at an average of twenty times on a monthly basis. The net effect is that the company is able to rapidly grow and perform well in terms of finances. I think Starbucks preference of owning its stores is informed by its production strategy of selling its own products in a coffeehouse setting. It has also devoted a considerable attention to the design of stores so as to provide customers with an informal atmosphere of comfort and relaxation. It sells more than just the coffee and as such by owning its stores the company is able to influence a number of factors

Leisure and Tourism Operation Management Essay Example | Topics and Well Written Essays - 2500 words

Leisure and Tourism Operation Management - Essay Example Another aim was to prove that the hypothesis of acceptance of this culture leads to devastating consequences and that high turnover must be prevented, minimized, and managed. In order to meet the aims of the study, it was necessary to examine the causes and nature of turnover, whether it is considered to be bad or if it is considered to be good and necessary in the operation of companies. Existing arguments were examined as some believe that high turnover is desired in the hospitality industry yet some do not believe it to be a positive thing. Another argument included turnover as a culture for the industry. Interviews from hotels/resorts owners and managers were used to provide which proved the writer's hypotheses and aims. Turnover is when employees stay only for a short time before moving on or becoming dismissed for one reason or another. (D'Announzio-Green, Maxwell, & Watson 2002, quote Barron and Maxwell, 1993, p. 5). "Turnover is the result of both quits and layoffs. Thus, some turnover is a result of jobs in one firm being destroyed and jobs in another firm being created- and hence due to the reallocation of jobs across the economy in response to changes Student's Last Name 3 in product demand. A majority of job changes, however, are because workers reshuffle across the same set of jobs, and this worker reallocation occurs over and above job reallocation," as written by Lane (2000). Some hospitality industry sources report that turnover rate is between 100 and 150 percent each year. This causes poor attitude amongst staff and affects the quality of service and care that is given to the customers. (Crabtree, 2005.) It is usually considered to be a bad thing; however, research has shown that a little turnover is essential to the well being of an organization. Scholtz (n.d.) reports that there are companies who have a turnover rate of ten percent or more and think it is a good thing because "they are replacing the bottom performers with new people will improve organizational performance." A certain amount of turnover may be desired by businesses. Some examples include high-pressured jobs with lots of customer contact such as working the counter at a fast food outlet or a high-volume cafeteria. (Mullins, 1998, p. 176.) At some time, pressure, difficult customers and repetitive tasks will affect performance. Therefore, some turnover is good. However, its negative con sequences far outweigh the positive and turnover can snowball and get out of control if not managed properly. There are many other consequences including lack of respect from the public, first experience on the job, harassment by customers, less than par working conditions, low wages, terrible work schedules, etc. A culture of high turnover in the company may consist of victimization at work. Whether it is by customers, other staff members, or management, this is extremely detriment to all. Victimized employees can experience a high level of stress, low tolerance of stress, tiredness, and headaches.

Legal Research on the Preclusion by the Federal Law of the United Article

Legal Research on the Preclusion by the Federal Law of the United States of Formation of Legal Systems affecting Individuals - Article Example While mostly all the laws are embedded with the inherent responsibility of the protection of the rights of the individuals who are the citizens of the countries concerned, they are framed in such a way that they take as their matter of concern only a group of individuals. This also gives rise to thoughts about the role of the states in providing the legal frame work. Even from the ancient times of civilization, the role of the state has always been primary when designing and applying a specific legal framework and there had been no instances where the law makers had framed legal provisions that apply only to specific persons or the individuals involved. But it cannot be denied that the subsequent interpretations of the legal provisions had made various legal provisions favorable or unfavorable to individuals depending on the circumstances of the individual cases. But those situations could only be attributed to the lacunae in the legislations or the clever and efficient interpretations of the provisions put forth by the lawyers and the opinions of the judges formed on the basis of such interpretations and arguments. But still the world had witnessed intensive debates over the intervention of the state in the formulation of the legal framework that affected individuals voluntarily or involuntarily. A classic example of such an instance can be cited in the case of Schiavo1 in which all the academics, scholars, journalists, columnists and whoever can write or say something irrespective of their depth of knowledge vehemently debated the changes made by the Federal Laws only to affect the life of an individual in Schiavo. With this background I intend to present this paper on the ability of a country like United States to handle the Bills of Attainder or the legal framework made to control the acts or deeds, commissions or omissions of an individual. I also present though a series of researched materials, whether the Country was effective in doing so. I intend further to present to the readers a comprehensive theory on the same issue, as being handled in other developed nations like United Kingdom and Japan. The paper also makes known to the reader the impact of the legal framework on the lives of the individuals in a country like Russia where the State till recently had backed communist views that concern more about the individuals and the community more. Though many similarities can be found between the legislative frameworks of United States and the United Kingdom, I chose these two countries for comparison to show the differences in the approaches of the countries' legal systems in the protection of the individual citizens. In a similar way I presumed that the legislations in Russia once being a communist country should deal differently with the issue of the laws affecting individuals and hence the research on Russian legal

Earthquake in Pakistan Essay Example for Free

Earthquake in Pakistan Essay Earthquake activity in Pakistan is mainly concentrated in the north and western sections of the country, along the boundary of the Indian plate and the Iranian and Afghan micro-plates. The Chaman Fault runs along Pakistans western frontier with Afghanistan from Kalat, in the northern Makran range, past Quetta and then on to Kabul, Afghanistan. A fault also runs along the Makran coast and is believed to be of the same nature as the West Coast fault along the coast of Maharashtra, India. An active subduction zone exists off the Makran coast. The great 1945 earthquake was centred in this region. This zone forms the boundary between the Arabian and the Iranian micro-plate, where the former subducts or dives beneath the latter. Thrust zones run along the Kirthar, Sulaiman and Salt ranges. There are four faults in and around Karachi and other parts of deltaic Indus, and Makran coast. The first is the Allah Bund fault that passes through Shahbundar, Jah, Pakistan Steel Mills, and runs through eastern parts of the city and ends near Cape Monz. This fault, in fact, has caused extensive damage in the past many centuries in the deltaic areas. The destruction of Bhanbhor in the 13th century and damage to Shahbundar in 1896 were caused by this fault. The other one emanates from the Rann of Kutchh. The third one is the Pubb fault which ends into Arabian sea near Makran coast and the last one is located in the lower Dadu district near Surajani and falls in the vicinity of Karachi. Tsunamis or tidal waves have also affected the coast of Pakistan. The worst case was in 1945 when an earthquake of magnitude 7. 9 struck the Makran coast, waves as high as 12 meters were reported.

Exchange Rate and Inflation in Pakistan Economy

Exchange Rate and Inflation in Pakistan Economy Inflation exchange rate are two main factors of macro-economics. Inflation is an increase in the level of prices of goods services in an economy by the passage of time. Exchange rate is very important factor in economic which impact imports exports of country. A country does not always want the exchange rate to fluctuate because an exchange rate influences the levels of its imports exports, which are the component of fiscal policy. Policy makers want to hold rate at a particular level or within a certain range in order to achieve given domestic policy goals related to the level of growth of GDP. In the perfect mobility the exchange rate movements and an adjustment of goods market is relative to asset market and consistent expectations. The extends that output responds to a monetary expansion in the short run, this acts as an effect on exchange depreciation which lead to an increase in interest rates (Dornbusch, 1976). There are three types of ways which gives stickiness in prices, the prices set by the firms in that currencies, the firms set the prices for currencies of consumers, or firms set the prices in the currencies of producers (Engel, 2001). When the exchange rates changes, the changes appear in the relative prices and make to generate additional uncertainty for equilibrium in markets. However, there is also defining that the changes in terms of trade play the larger role of changes in the exchange rates which affect the variability of exchange rates (Stockman, 1980). Inflation is one of the key indicators of the country and provides important information on the state of the economy and sound macroeconomic policies that govern it. Inflation is the production of the expenses of manner of things arise which leads to the advancement of the last in the price of meals. For example, if the matter is hardy and this leads to the increment of the price of the production of the costs of increasing, and in turn this leads to increasing prices to keep the crowd his profits. The discretionary nature of the existing monetary policy in Pakistan is inflation, and it is targeting to hit on the Pakistani economy by focusing attention on the monetary policy. So the government of Pakistan is to make monetary policy more transparent for achieving the explicit goal, and decreasing the inflation. Therefore, it is increasing the public understanding of the strategy of central bank to deliver the target, so the State Bank of Pakistan helps to provide an anchor for inflati on expectations in the economy. The State Bank of Pakistan (SBP) has achieving a low rate of inflation in a high priority, and also aims to support the national country objectives of Pakistan to meet the economic diversification and competitiveness in the form of export from the world. 1.2 Problem statement This study is to examine the impact of exchange rate on inflation in Pakistan economy. 1.3 Hypothesis H1: The Exchange rate explains the inflation. 1.4 Outline of the Study The variability of industrial production output higher in the regime of fixed exchange rates instead of regime of flexible exchange rates (Flood Hodrick, 1986). The effect of consumption goods purchases by the government is not the private utility, but per capita real government expenditure are the composite of individual consumption of goods. So notice that the demand of money depends on consumption of goods rather than income and that is the important distinction of closed economies (Obstfeld Rogoff, 1995). Pakistan major import is crude oil which is purchased in dollars. If foreign exchange rate increases, it has increased the cost of oil that has adverse impact on the economy of Pakistan. Inflation is also caused by international loans and the national debt. As nations borrow money, have to deal with the interest that the final prices increase as a way to keep up with debts. The main problem of Pakistan is external debt, which has altered the economic balance. The most immediate effect of inflation is the declining purchasing power of the rupee and its depreciation. This study has been helpful for economic policy makers, foreign investors, economic analysts, business students who are interested in macro-economics studies. This study identifies how two macro-economic factors are related with each other. 1.5 Definitions Variables: For this study the following variables have utilized:- Exchange Rates à ¢Ã¢â€š ¬Ã¢â‚¬Å" Independent Variable: The exchange rates are foreign exchange rate between two currencies. Every country has a foreign exchange market and is one of the largest markets in all countries of the world. It converts 3.2 trillion USD currency conversion. It has two types i.e. fixed and floating exchange rates. Meese and Rogoff (1988), it depends on fundamentals such as money supplies, real incomes, interest rates and inflation. Listen Read phonetically Dictionary View detailed dictionary Inflation à ¢Ã¢â€š ¬Ã¢â‚¬Å" Dependent Variable: Inflation has increased the level of prices of commodity, goods and services in an economy by the passage of time. Price inflation measure is the rate of inflation, the annual percentage change in general price index (usually the Consumer Price Index) over time. Effects of inflation on the economy have manifold and simultaneously positive and negative. Negative effects of inflation include a decrease in the real value of money and other monetary items over time, uncertainty over future inflation which discourages investment and savings, and high inflation leads to shortages of goods if consumers begin hoarding out of concern that prices increase in the future. Positive effects include a development of economic recessions, and debt assistance by reducing the real level of debt. CHAPTER 2: LITERATURE REVIEW The analysis of the monetary determinants of inflation is of obvious interest for the nations that pursue a policy of inflation targeting. This study focuses on Pakistani economy that is currently following an Inflation targeting approach or did so in the recent past. Currency stability plays an important role for the monetary authorities in this economy. Exception of real money growth rule is included in the estimation of Phillips curves for the four economies Bayesian model averaging (McCallum, 1999). Entrepreneurs seek stability in the course says that keeps the price of imported items from growth due to rupee depreciation, which is not only support the economy in general, but also producers who use huge amounts of imported cases in the production of exportable surplus. Since the start of this fiscal year, while the rupee has lost about 2.5 percent of its value beside the dollar and its depreciation rate is unlikely to accelerate in the coming months due to continued inflow of foreign capital and funds. Also include the support of IMF, partial release of the fund, a coalition of U.S., which is part of its payment obligations by the Friends of Democratic Pakistan, extremely strong inflow of return of foreign workers of portfolio investments and possible raise up in exports and foreign direct investment in the third quarter of fiscal year. The current stability of the rupee has helped to contain imported inflation and the weakening of inflationary expectations. Bankers expect that trend continues throughout this financial year, a national unit is depreciated more than 7.0-7.5 percent during the entire fiscal year, against 19.5 percent last year. Businesses verify that the bankers are the forward currency cover in accordance with this expectation. What Pakistan needs today is not a platform to launch an à ¢Ã¢â€š ¬Ã…“economic revival programà ¢Ã¢â€š ¬? but what people need is an actual à ¢Ã¢â€š ¬Ã‹Å"economic revival.à ¢Ã¢â€š ¬Ã¢â€ž ¢ The main problem of Pakistan is the foreign debt which has risen to unmanageable proportions in the last decade and the repayment of which has created turbulence in external balance of Pakistan to such an extent that it does not meet its minimum necessary development requirements. At present Pakistan cannot survive without fresh borrowings from foreign donor agencies. As emphasized by Choudhri and Hakura (2006), an important policy debate for the contemporaneous monetary and exchange rate policy implementations is to reveal the degree to which changes in exchange rates or import prices impact or pass-through into domestic consumer prices. Presently there are three rates of exchange i.e. the bank rate, the inter bank rate and the open market rate. The overall effect on the foreign exchange rates should not be more than 5 to 6 per cent as the increased inflow of foreign exchange have neutralize the effect of the increased demand of private imports. If the foreign exchange earners and remitters keep on getting a fair exchange rate for earnings, it is visualized that in the next few years exports can touch the $15 billion mark and overseas Pakistani remittances can fetch $5 billion. It was concluded that the exchange rate feed shock on domestic inflation, first at the level of prices of the manufacturer and then the level of consumer prices and the im pact of shocks on the variables of price the various stages of the supply is different. The purchasing power parity theory doctrine means different things to different people. There are two versions of this theory that is called the à ¢Ã¢â€š ¬Ã‹Å"absoluteà ¢Ã¢â€š ¬Ã¢â€ž ¢ and the à ¢Ã¢â€š ¬Ã‹Å"relativeà ¢Ã¢â€š ¬Ã¢â€ž ¢ interpretation. The first version of purchasing power theory calculated as a ratio of consumer goods prices for any country that has tended to the equilibrium rates of exchange. In the second version of relative interpretation the rate of exchange rate have been determined between the two countries and quoted with general levels of prices of two countries. This version amend the international trade theory which have been the part of PPP, in which the non-traded goods (services) has been introduced, but the advantage is greater in regards of traded goods than non-traded goods, because of the assumptions of marginal rates of transformation. The correlation among purchasing power parity and exchange rates provides the international comparison of national incomes and living standards (Balassa, 1964). Lawrence (1976) gave another review of this purchasing power parity theory. It has define two applications in economics, the first application use of the conversion factor to transfer the data in one national way to another. The use of PPP is mainly the body of (index number theory) and applications of GDP that have improved over the years and path breaking studies in the area continue to appear. The second application of PPP did not have the widespread acceptance, which has remained the unsophisticated applications. Stockman (1980) develops the model of determination of prices of goods and exchange rates. The changes in commodity prices due to supply and demand affect the change in exchange rates by purchasing power parity deviations.The changes in exchange rates have failed to resemble the changes in prices of goods, because exchange rates more volatile than prices levels and inflation rates. The study proposes the equilibrium of exchange rates behavior and different international goods that have been traded. This relationship cannot exploited by the government, because greater the changes in terms of trade the larger the changes in exchange rates variability. The deviations from PPP persists that variation of exchange rates more than ratios of price indexes. The results found the two interpretation of the relationship between exchange rates and terms of trade. In the first, the causes that affect the changes in exchange rates also affect the change in terms of trade because prices of goods do not adjust to clear the markets. This interpretation also found in the research of Dornbusch (1976), and Isard (1977), the analysis formally differentiates the system with respect to exchange rates and allow prices to change but not the changing in asset stocks. The interpretation presented the elasticity approach of the foreign exchange market and the relation between the trade and exchange rates. Real supply and demand shocks affect prices and the derived demand of exchange rates. These changes in demand for foreign exchange result the supply and demand shocks and that should affect the equilibrium of exchange rates. In second interpretation the expected rate of change of exchange rates revealed on the forward foreign exchange market. This should be related the anticipated change in the terms of trade and the inflation differentials. A persuasive argument about the level of exchange rates is only associated with not causes of the relative prices changes. Bilson (1985) gives the empirical findings about macroeconomic and flexible exchange rate of the U.S dollar related to PPP theory. From the perspective of this research, the sluggish price adjustment in the commodity markets resulted in increased variability in exchange rates. For the demonstration of result it is important because the instability of floating exchange rate is due to the inherent differences between commodity and foreign exchange markets. The determination of the expected future rate is impossible, because it is more difficult to reject the forward parity condition. The major part of the forward parity is the variation in the premium is due to the forecast. The object of this study is to determine that if the forward parity failed is the cause of instability in the same way that the failure of purchasing power parity. The findings develop that currency risk premium is the important factor relative to floating rate system, and movement in the exchange rate are dominate d by the non speculative activity and it has the adverse effect on world economy. Meese and Rogoff (1983) analyzed the outcome of sample forecasting accuracy on various models. The study estimated the horizons of the dollar with different country currencies, like Dutch mark, Japanese yen, and Britain pound that traded to weight the dollar exchange rates. It has also studied the flexible exchange rates with the monetary models of sticky price, so the model of sticky price, which incorporates the current account. The first model is structural models in which it requires to generate the forecasts of exchange rates and explanatory variables. It contains the explanatory power, but it is predicted badly because the explanatory variables are difficult to predict. The second is the univariate time series model in which it identifies a variety of prefiltering techniques involves differencing, de-seasonalizing and removing time trends. The relative performance of these techniques is of interest in itself. The third model use is the random walk model. It is also linked with this univariate time series model. It is used as the predictor of the current spot rate with the entire future spot rate, and it requires no estimation. In this study the performance of estimated univariate time series models or candidate structural model is no good instead it is worst. From a methodological stand point the view that the outcome of sample model fit is an important criterion when evaluating exchange rate, but the estimation of out of sample is failure with time series models that are well approximated the major country exchange rates. Feinberg and Kaplan (1992) evaluated and interact the real exchange rates index expectations is developed and used to explore the role of determination on domestic producer prices. The fact that time path of the exchange rate has directly affected the input costs, and the price of substitutes strongly. To examine the links between both actual and anticipated movements in the dollar and relative domestic producer prices, it chooses to analyze price responses to real exchange rate changes. The effect is dependent on the nature of substitutability between imports and domestic goods. The major finding is that the period of appreciation and depreciation over the past 10 years to inhibit the pass through in to domestic prices. In depreciation the market share to enjoy the continued good times kept prices other than expected. The theory of optimum currency areas, which is usually presented by the other name called flexible exchange rate system, but it is proponent as a device of depreciation that takes place of unemployment when the balance of payment is deficit and appreciation when it replaces inflation when it is surplus. The problem can be exposed and more revealed by defining a currency area within when exchange rates are fixed. Three answers can be given, first certain parts of the world are going through the process of economic integration, so new experience can be made and what constitutes the optimum currency area can be given the meaning of these experiments. Second those countries that have flexible exchange rates are likely to face problems with the theory of optimum currency areas, so these do not coincide the optimum currency areas with the national currency. Third the idea that illustrates the functions of currencies which have been treated in economic literature, and sometimes neglected in the problems of economic policy. In the currency area, countries with different currencies including national country currencies interact pace of employment in deficit, because there is the haveingness to inflation by the surplus countries. The argument for flexible exchange rate system is based on national currencies, and is valid about mobility of factor, so if it is high in the country and low in the foreign countries, the flexible exchange rates system on home country currencies has to work effectively. The concept of optimum currency area has practically applicable only in those areas, where the state has the political organization in the country. The factor mobility is most considered and is more relative rather than absolute concept, with both industrial and geographical factors. It is likely to change the alterations with time over time in conditions, with the conditions of political and economic stability. Money is the convenience that restricts the optimum number of curre ncies, so in terms of this argument the optimum currency area which is composed in number of countries (Mundell, 1961). In another review, the author defines the stabilization of capital mobility policy under the exchange rates which is fixed and flexible in the currencies markets. It concerns the theoretical and practical approach of the increased mobility of capital. Obstfeld and Rogoff (1995) analyses the global macroeconomic dynamics to supply framework based on competition and nominal prices. The effects of macroeconomic policies on output and exchange rates have not been yet persuaded to abandon. The framework which integrated exchange rates dynamics and current account yields is a new perspective, it realize that when prices are sticky the government should spend on shock raises short run output and long run output. The assumption is that home and foreign government purchases the consumption goods that do not directly affect the private utility, but the per capita real government consumption expenditure is a composite consumption of individual goods. It explains that the composite consumption for the services is to balance the opportunity cost and notice that the money depends on consumption rather than income, that distinction is more important in closed economies. The results of this study develop framework that give new foundations about some of the fundamentals problems in international finance. It realizes that the existing Keynesian model is incomplete to offer a satisfactory treatment of exchange rates, output and the current account, but the model which is used in this study is more complex, because it yields simple and intuitive insights of monetary and fiscal policies. It can be extended in a number of dimensions, including non traded goods, market behavior, government spending, and labor market distortions and so on. It goes beyond the essentially statistical approach that handles the current account and exchange rates issues, most importantly this approach allows to analyze the welfare implications of policies. Melvin (1985) has regarded and focused that how the choice of an exchange rate system can affect the stability of the economy. The appropriate nature of the exchange rate system has differed of the disturbance to the economy. It presented the evidence that indicate that the approach is more consistent according to practice by actual country. The other approach is to reach the desirable price stability, in which some mechanism tells the floating rates superiority has become less in the face of monetary shocks. It finds that the flexibility in exchange rates depends not on openness and less important in the mobility of capital, but its positive effects were found for the economic development. The purpose of this study is to consider the determinants of exchange rates system choice, which indicates the theoretical approach with the country choices. The result found that the choice of an exchange rate system has the role of the disturbance to the economy. It suggests that the money shock s are the key of exchange rate system choice in an economy, in which it seeks to minimize the fluctuations in the country price levels. It also suggests that the greater the price shocks the more is a float, so it affects greatly domestic money shocks. Lothian and Taylor (1996) examine the real exchange rate behavior, and explain the variations in sample of stationary univariate equations in real exchange rates. The study investigates the additional insight in the exchange rates behavior that can be gained by considering the floating rate from the perspective of the data. These issues can be best understood on the subject of real exchange rates stability among the currencies of the major developed countries. Some of the pre-float studies support the fairly stable exchange rates in the long run. Subsequently, Dornbusch (1976), and Frenkel (1981), gave largely as the result of studies published, and reject the hypothesis of random walk performance of real exchange rates. The PPP shows the empirical movements in real exchange rates were highly persistent and effective. Although the PPP is reject the hypothesis of non-stationary behavior of exchange rates in long run. The result of this study shows that the longest span of two countrie s exchange rates are significantly mean reverting. The first model result indicates the 80 percent of the variation in the exchange rates of the history data of two countries. By using of another model, the results explaining the performance of remarkably well in the floating, so that this model produce better forecasts of the actual exchange rates. In line with recent studies, it fined that this process of mean reverting is quit slow, with estimated adjustment of data. In the long run the PPP equilibrium is remaining a useful empirical approximation. Gerlach (1988) examine the dynamic interrelationship between innovations in monthly industrial production in a set of economies, specifically this study attempt the output fluctuations that have been correlated during the periods of fixed and flexible exchange rates. The current has to manage exchange rates flexibility that has reduces the interdependence across countries. It should follow the recent article of Flood and Hodrick (1986) in which it is argued that the variability have been higher during a regime of fixed exchange rates instead of flexible exchange rates, but the conclusion of author is striking so sharply. The results of this study of multiple country output movements under fixed and flexible exchange rates are clear. The variances of growth rates should be higher in the flexible exchange rates and in the fixed exchange rates periods. These variances are statistically significant related to the degree of openness and national income. Thirdly the output movements are co rrelated across countries under exchange rate regime, particularly the co movements in output are more important in the business cycle frequently during the recent years of managed exchange rates flexibility. CHAPTER 3: RESEARCH METHODS 3.1 Method of Data Collection The Data of Consumer price index (Inflation) has been collected from federal bureau of statistics while the data of exchange rate has been collected from Pacific Exchange Rate Service, both are the secondary, published source of data. 3.2 Sampling Technique The sampling technique that has been applicable is à ¢Ã¢â€š ¬Ã…“convenience samplingà ¢Ã¢â€š ¬? as it is easily accessible to collect the relevant information from the source and it is inexpensive and hence, gets a gross estimate of the results. (What is The Advantage of Convenience Sampling, 2007-2010). 3.3 Sample size The sample size is selected on the basis of limitations and scope of the research therefore, Last 54 years i.e., 1947 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 2010, data of inflation and exchange rate is decided to be examined. 3.4 Research Model developed From the above defined and explanations of both the dependent i.e. inflation and independent i.e. exchange rates variables and also discussing the effects of exchange rate on inflation and how it have affects on economic of a country. In this study first analysis is the correlation between these two variables, and identifies the significant relationship. Then it analyzes and evaluates the empirical investigation in regression model as a statistical tool. The simple regression model which can be defined in the equation that represented below: Inflation = ÃŽÂ ²Ãƒ Ã‚ ¾ + ÃŽÂ ²(exchange rate) + ÃŽÂ µ Whereas, ÃŽÂ ²Ãƒ Ã‚ ¾ = the intercept of the equation. ÃŽÂ ² (exchange rate) = the changing coefficient of exchange rate. ÃŽÂ µ = the error term of the equation. From the above explained model, the study develop the following estimation and used for the establishment of the model. Therefore, all the compatible data has entered in to SPSS for statistical analysis. 3.5 Statistical Technique The statistical test that has been applied is single linear regression. This is because only one independent variable and one dependent variable to be used in this research. Frankel (1979) defined that most of the recent work on floating exchange rate goes under the name of the monetary or asset view. The exchange rate is moving to equilibrate the international demand for assets, rather than the international demand for the flow of goods. But with the asset view there is à ¢Ã¢â€š ¬Ã‹Å"Chicago Theoryà ¢Ã¢â€š ¬Ã¢â€ž ¢ in which assumes that prices are perfectly flexible. As the consequences when nominal interest rate changes, it has also reflect the changes in expected inflation rate, so as the domestic currency expected to lose value through inflation and depreciation. This is the rise in the exchange rates and gets the positive relationship between positive exchange rate and inflation. CHAPTER 4: RESULTS 4.1 Findings and Interpretation of the result The simple linear regression technique is used to determine the explanation of dependent variable i.e. inflation due to independent variable i.e. exchange rate. The analysis of the result is defined below: Table à ¢Ã¢â€š ¬Ã¢â‚¬Å" 4.1 Model Summary Model R Square Adj. R Square F Sig. 1 .226 .211 15.207 .000 The table à ¢Ã¢â€š ¬Ã¢â‚¬Å" 4.1 shows that the regression model is best fit to predict as F test value is significant. The variation of regression model is explained by 22.6% i.e. the change in inflation is 22.6% by the exchange rate. Table à ¢Ã¢â€š ¬Ã¢â‚¬Å"4.2 Coefficients Model Un-standardized Coefficients Standardized Coefficients T Sig. B Std. Error Beta 1(Constant) Exchange Rate 121.725 .794 6.887 .204 .476 17.673 3.900 .000 .000 Table à ¢Ã¢â€š ¬Ã¢â‚¬Å" 4.2 the coefficients results show that there is the positive affiliation between exchange rates with related to inflation in Pakistan. The results reflect that the exchange rates beta has the positive value and the T-value of both the variables is significant statistically at 0.05. From the above applied regression model, the result concludes in the way that it explains the relationship of both the dependent and independent variables significantly. The Inflation and exchange rates result shows that the beta value of the variable and T-value is significant at the 0.000 level. So the results conclude that the exchange rates value should significantly play its role in the relationship with related to inflation, but the exchange rates should not individually play a significant role in the relationship with inflation. The hypothesis is not rejected and that the exchange rate explains the inflation by 22.6%. The equation of regression model is written below: Inflation = 121.725 + 0.794 (exchange rate) + ÃŽÂ µ 4.3 Hypothesis Assessment Summary Hypothesis R Square F Sig. Regression Coefficient ÃŽÂ ² T Empirical Conclusion Exchange rate explains inflation. .226 15.207 P .794 3.900 Accepted The hypothesis of this study is that exchange rate explains the inflation, which is being accepted and exchange rate is explaining inflation by 22.6%. These findings support to recent theories that suggested the foreign exchange market efficiency with the existence of risk at equilibrium. Wihlborg (1982) examined the relation of interest rates, exchange rate and currency risks in this study. It identifies the test which empirically shows the impact of currency on interest rates and exchange rates. In this study there are three different ways in which the importance of currency risks for interest rate and exchange rate determination. The results presented here that substantiate the changes in the level of currency risk have a non-negligible impact on the changes of exchange rates and on rates of interest of relative between currencies. CHAPTER 5: CONCLUSION, DISCUSSIONS, IMPLICATIONS AND FUTURE RESEARCH 5.1 Conclusion This study is concluded to examine the dependency of exchange rate on inflation by using the data of consumer price index (CPI) as inflation and the data of exchange rate on yearly basis. The result of this study is highly significant so that the hypothesis of this study is not rejected. The result shows that 22.6% variation in inflation is due to the exchange rate in Pakistan. The analysis of this study also shows that if exchange rate becomes zero, the inflation exist to some extent. For example, if one unit of exchange rate increases, the inflation increases only by 0.794 times. 5.2 Discussions This study has applied exchange rate as independent variable and consumer price index (CPI) as dependent variable. For the availability of data, all the data should be available on daily monthly and yearly basis, but the data is used in order to consistent as yearly basis. The regression model has been formulated for these variable relationship investigations. The study developed the hypothesis that the exchange rate explains the inflation in Pakistan, and the findings are supported by the analysis done by Balassa (1964), Meese Rogoff (1983), Frankel (1979), and Mc Callum (1999) etc. 5.3 Implications and The result also accompanies that the exchange rates are the strength of character of foreign exchange market in Pakistan, and it should effect on each of the related variables as an inflationary basis. Therefore the State Bank of Pakistan and Government officials should realize the role of exchange rates in the economy and try to maintain exchange rates to stop or decrease the consumer price index in Pakistan, so that the price range of every thing should be in range of common men. Also Government should addres Exchange Rate and Inflation in Pakistan Economy Exchange Rate and Inflation in Pakistan Economy Inflation exchange rate are two main factors of macro-economics. Inflation is an increase in the level of prices of goods services in an economy by the passage of time. Exchange rate is very important factor in economic which impact imports exports of country. A country does not always want the exchange rate to fluctuate because an exchange rate influences the levels of its imports exports, which are the component of fiscal policy. Policy makers want to hold rate at a particular level or within a certain range in order to achieve given domestic policy goals related to the level of growth of GDP. In the perfect mobility the exchange rate movements and an adjustment of goods market is relative to asset market and consistent expectations. The extends that output responds to a monetary expansion in the short run, this acts as an effect on exchange depreciation which lead to an increase in interest rates (Dornbusch, 1976). There are three types of ways which gives stickiness in prices, the prices set by the firms in that currencies, the firms set the prices for currencies of consumers, or firms set the prices in the currencies of producers (Engel, 2001). When the exchange rates changes, the changes appear in the relative prices and make to generate additional uncertainty for equilibrium in markets. However, there is also defining that the changes in terms of trade play the larger role of changes in the exchange rates which affect the variability of exchange rates (Stockman, 1980). Inflation is one of the key indicators of the country and provides important information on the state of the economy and sound macroeconomic policies that govern it. Inflation is the production of the expenses of manner of things arise which leads to the advancement of the last in the price of meals. For example, if the matter is hardy and this leads to the increment of the price of the production of the costs of increasing, and in turn this leads to increasing prices to keep the crowd his profits. The discretionary nature of the existing monetary policy in Pakistan is inflation, and it is targeting to hit on the Pakistani economy by focusing attention on the monetary policy. So the government of Pakistan is to make monetary policy more transparent for achieving the explicit goal, and decreasing the inflation. Therefore, it is increasing the public understanding of the strategy of central bank to deliver the target, so the State Bank of Pakistan helps to provide an anchor for inflati on expectations in the economy. The State Bank of Pakistan (SBP) has achieving a low rate of inflation in a high priority, and also aims to support the national country objectives of Pakistan to meet the economic diversification and competitiveness in the form of export from the world. 1.2 Problem statement This study is to examine the impact of exchange rate on inflation in Pakistan economy. 1.3 Hypothesis H1: The Exchange rate explains the inflation. 1.4 Outline of the Study The variability of industrial production output higher in the regime of fixed exchange rates instead of regime of flexible exchange rates (Flood Hodrick, 1986). The effect of consumption goods purchases by the government is not the private utility, but per capita real government expenditure are the composite of individual consumption of goods. So notice that the demand of money depends on consumption of goods rather than income and that is the important distinction of closed economies (Obstfeld Rogoff, 1995). Pakistan major import is crude oil which is purchased in dollars. If foreign exchange rate increases, it has increased the cost of oil that has adverse impact on the economy of Pakistan. Inflation is also caused by international loans and the national debt. As nations borrow money, have to deal with the interest that the final prices increase as a way to keep up with debts. The main problem of Pakistan is external debt, which has altered the economic balance. The most immediate effect of inflation is the declining purchasing power of the rupee and its depreciation. This study has been helpful for economic policy makers, foreign investors, economic analysts, business students who are interested in macro-economics studies. This study identifies how two macro-economic factors are related with each other. 1.5 Definitions Variables: For this study the following variables have utilized:- Exchange Rates à ¢Ã¢â€š ¬Ã¢â‚¬Å" Independent Variable: The exchange rates are foreign exchange rate between two currencies. Every country has a foreign exchange market and is one of the largest markets in all countries of the world. It converts 3.2 trillion USD currency conversion. It has two types i.e. fixed and floating exchange rates. Meese and Rogoff (1988), it depends on fundamentals such as money supplies, real incomes, interest rates and inflation. Listen Read phonetically Dictionary View detailed dictionary Inflation à ¢Ã¢â€š ¬Ã¢â‚¬Å" Dependent Variable: Inflation has increased the level of prices of commodity, goods and services in an economy by the passage of time. Price inflation measure is the rate of inflation, the annual percentage change in general price index (usually the Consumer Price Index) over time. Effects of inflation on the economy have manifold and simultaneously positive and negative. Negative effects of inflation include a decrease in the real value of money and other monetary items over time, uncertainty over future inflation which discourages investment and savings, and high inflation leads to shortages of goods if consumers begin hoarding out of concern that prices increase in the future. Positive effects include a development of economic recessions, and debt assistance by reducing the real level of debt. CHAPTER 2: LITERATURE REVIEW The analysis of the monetary determinants of inflation is of obvious interest for the nations that pursue a policy of inflation targeting. This study focuses on Pakistani economy that is currently following an Inflation targeting approach or did so in the recent past. Currency stability plays an important role for the monetary authorities in this economy. Exception of real money growth rule is included in the estimation of Phillips curves for the four economies Bayesian model averaging (McCallum, 1999). Entrepreneurs seek stability in the course says that keeps the price of imported items from growth due to rupee depreciation, which is not only support the economy in general, but also producers who use huge amounts of imported cases in the production of exportable surplus. Since the start of this fiscal year, while the rupee has lost about 2.5 percent of its value beside the dollar and its depreciation rate is unlikely to accelerate in the coming months due to continued inflow of foreign capital and funds. Also include the support of IMF, partial release of the fund, a coalition of U.S., which is part of its payment obligations by the Friends of Democratic Pakistan, extremely strong inflow of return of foreign workers of portfolio investments and possible raise up in exports and foreign direct investment in the third quarter of fiscal year. The current stability of the rupee has helped to contain imported inflation and the weakening of inflationary expectations. Bankers expect that trend continues throughout this financial year, a national unit is depreciated more than 7.0-7.5 percent during the entire fiscal year, against 19.5 percent last year. Businesses verify that the bankers are the forward currency cover in accordance with this expectation. What Pakistan needs today is not a platform to launch an à ¢Ã¢â€š ¬Ã…“economic revival programà ¢Ã¢â€š ¬? but what people need is an actual à ¢Ã¢â€š ¬Ã‹Å"economic revival.à ¢Ã¢â€š ¬Ã¢â€ž ¢ The main problem of Pakistan is the foreign debt which has risen to unmanageable proportions in the last decade and the repayment of which has created turbulence in external balance of Pakistan to such an extent that it does not meet its minimum necessary development requirements. At present Pakistan cannot survive without fresh borrowings from foreign donor agencies. As emphasized by Choudhri and Hakura (2006), an important policy debate for the contemporaneous monetary and exchange rate policy implementations is to reveal the degree to which changes in exchange rates or import prices impact or pass-through into domestic consumer prices. Presently there are three rates of exchange i.e. the bank rate, the inter bank rate and the open market rate. The overall effect on the foreign exchange rates should not be more than 5 to 6 per cent as the increased inflow of foreign exchange have neutralize the effect of the increased demand of private imports. If the foreign exchange earners and remitters keep on getting a fair exchange rate for earnings, it is visualized that in the next few years exports can touch the $15 billion mark and overseas Pakistani remittances can fetch $5 billion. It was concluded that the exchange rate feed shock on domestic inflation, first at the level of prices of the manufacturer and then the level of consumer prices and the im pact of shocks on the variables of price the various stages of the supply is different. The purchasing power parity theory doctrine means different things to different people. There are two versions of this theory that is called the à ¢Ã¢â€š ¬Ã‹Å"absoluteà ¢Ã¢â€š ¬Ã¢â€ž ¢ and the à ¢Ã¢â€š ¬Ã‹Å"relativeà ¢Ã¢â€š ¬Ã¢â€ž ¢ interpretation. The first version of purchasing power theory calculated as a ratio of consumer goods prices for any country that has tended to the equilibrium rates of exchange. In the second version of relative interpretation the rate of exchange rate have been determined between the two countries and quoted with general levels of prices of two countries. This version amend the international trade theory which have been the part of PPP, in which the non-traded goods (services) has been introduced, but the advantage is greater in regards of traded goods than non-traded goods, because of the assumptions of marginal rates of transformation. The correlation among purchasing power parity and exchange rates provides the international comparison of national incomes and living standards (Balassa, 1964). Lawrence (1976) gave another review of this purchasing power parity theory. It has define two applications in economics, the first application use of the conversion factor to transfer the data in one national way to another. The use of PPP is mainly the body of (index number theory) and applications of GDP that have improved over the years and path breaking studies in the area continue to appear. The second application of PPP did not have the widespread acceptance, which has remained the unsophisticated applications. Stockman (1980) develops the model of determination of prices of goods and exchange rates. The changes in commodity prices due to supply and demand affect the change in exchange rates by purchasing power parity deviations.The changes in exchange rates have failed to resemble the changes in prices of goods, because exchange rates more volatile than prices levels and inflation rates. The study proposes the equilibrium of exchange rates behavior and different international goods that have been traded. This relationship cannot exploited by the government, because greater the changes in terms of trade the larger the changes in exchange rates variability. The deviations from PPP persists that variation of exchange rates more than ratios of price indexes. The results found the two interpretation of the relationship between exchange rates and terms of trade. In the first, the causes that affect the changes in exchange rates also affect the change in terms of trade because prices of goods do not adjust to clear the markets. This interpretation also found in the research of Dornbusch (1976), and Isard (1977), the analysis formally differentiates the system with respect to exchange rates and allow prices to change but not the changing in asset stocks. The interpretation presented the elasticity approach of the foreign exchange market and the relation between the trade and exchange rates. Real supply and demand shocks affect prices and the derived demand of exchange rates. These changes in demand for foreign exchange result the supply and demand shocks and that should affect the equilibrium of exchange rates. In second interpretation the expected rate of change of exchange rates revealed on the forward foreign exchange market. This should be related the anticipated change in the terms of trade and the inflation differentials. A persuasive argument about the level of exchange rates is only associated with not causes of the relative prices changes. Bilson (1985) gives the empirical findings about macroeconomic and flexible exchange rate of the U.S dollar related to PPP theory. From the perspective of this research, the sluggish price adjustment in the commodity markets resulted in increased variability in exchange rates. For the demonstration of result it is important because the instability of floating exchange rate is due to the inherent differences between commodity and foreign exchange markets. The determination of the expected future rate is impossible, because it is more difficult to reject the forward parity condition. The major part of the forward parity is the variation in the premium is due to the forecast. The object of this study is to determine that if the forward parity failed is the cause of instability in the same way that the failure of purchasing power parity. The findings develop that currency risk premium is the important factor relative to floating rate system, and movement in the exchange rate are dominate d by the non speculative activity and it has the adverse effect on world economy. Meese and Rogoff (1983) analyzed the outcome of sample forecasting accuracy on various models. The study estimated the horizons of the dollar with different country currencies, like Dutch mark, Japanese yen, and Britain pound that traded to weight the dollar exchange rates. It has also studied the flexible exchange rates with the monetary models of sticky price, so the model of sticky price, which incorporates the current account. The first model is structural models in which it requires to generate the forecasts of exchange rates and explanatory variables. It contains the explanatory power, but it is predicted badly because the explanatory variables are difficult to predict. The second is the univariate time series model in which it identifies a variety of prefiltering techniques involves differencing, de-seasonalizing and removing time trends. The relative performance of these techniques is of interest in itself. The third model use is the random walk model. It is also linked with this univariate time series model. It is used as the predictor of the current spot rate with the entire future spot rate, and it requires no estimation. In this study the performance of estimated univariate time series models or candidate structural model is no good instead it is worst. From a methodological stand point the view that the outcome of sample model fit is an important criterion when evaluating exchange rate, but the estimation of out of sample is failure with time series models that are well approximated the major country exchange rates. Feinberg and Kaplan (1992) evaluated and interact the real exchange rates index expectations is developed and used to explore the role of determination on domestic producer prices. The fact that time path of the exchange rate has directly affected the input costs, and the price of substitutes strongly. To examine the links between both actual and anticipated movements in the dollar and relative domestic producer prices, it chooses to analyze price responses to real exchange rate changes. The effect is dependent on the nature of substitutability between imports and domestic goods. The major finding is that the period of appreciation and depreciation over the past 10 years to inhibit the pass through in to domestic prices. In depreciation the market share to enjoy the continued good times kept prices other than expected. The theory of optimum currency areas, which is usually presented by the other name called flexible exchange rate system, but it is proponent as a device of depreciation that takes place of unemployment when the balance of payment is deficit and appreciation when it replaces inflation when it is surplus. The problem can be exposed and more revealed by defining a currency area within when exchange rates are fixed. Three answers can be given, first certain parts of the world are going through the process of economic integration, so new experience can be made and what constitutes the optimum currency area can be given the meaning of these experiments. Second those countries that have flexible exchange rates are likely to face problems with the theory of optimum currency areas, so these do not coincide the optimum currency areas with the national currency. Third the idea that illustrates the functions of currencies which have been treated in economic literature, and sometimes neglected in the problems of economic policy. In the currency area, countries with different currencies including national country currencies interact pace of employment in deficit, because there is the haveingness to inflation by the surplus countries. The argument for flexible exchange rate system is based on national currencies, and is valid about mobility of factor, so if it is high in the country and low in the foreign countries, the flexible exchange rates system on home country currencies has to work effectively. The concept of optimum currency area has practically applicable only in those areas, where the state has the political organization in the country. The factor mobility is most considered and is more relative rather than absolute concept, with both industrial and geographical factors. It is likely to change the alterations with time over time in conditions, with the conditions of political and economic stability. Money is the convenience that restricts the optimum number of curre ncies, so in terms of this argument the optimum currency area which is composed in number of countries (Mundell, 1961). In another review, the author defines the stabilization of capital mobility policy under the exchange rates which is fixed and flexible in the currencies markets. It concerns the theoretical and practical approach of the increased mobility of capital. Obstfeld and Rogoff (1995) analyses the global macroeconomic dynamics to supply framework based on competition and nominal prices. The effects of macroeconomic policies on output and exchange rates have not been yet persuaded to abandon. The framework which integrated exchange rates dynamics and current account yields is a new perspective, it realize that when prices are sticky the government should spend on shock raises short run output and long run output. The assumption is that home and foreign government purchases the consumption goods that do not directly affect the private utility, but the per capita real government consumption expenditure is a composite consumption of individual goods. It explains that the composite consumption for the services is to balance the opportunity cost and notice that the money depends on consumption rather than income, that distinction is more important in closed economies. The results of this study develop framework that give new foundations about some of the fundamentals problems in international finance. It realizes that the existing Keynesian model is incomplete to offer a satisfactory treatment of exchange rates, output and the current account, but the model which is used in this study is more complex, because it yields simple and intuitive insights of monetary and fiscal policies. It can be extended in a number of dimensions, including non traded goods, market behavior, government spending, and labor market distortions and so on. It goes beyond the essentially statistical approach that handles the current account and exchange rates issues, most importantly this approach allows to analyze the welfare implications of policies. Melvin (1985) has regarded and focused that how the choice of an exchange rate system can affect the stability of the economy. The appropriate nature of the exchange rate system has differed of the disturbance to the economy. It presented the evidence that indicate that the approach is more consistent according to practice by actual country. The other approach is to reach the desirable price stability, in which some mechanism tells the floating rates superiority has become less in the face of monetary shocks. It finds that the flexibility in exchange rates depends not on openness and less important in the mobility of capital, but its positive effects were found for the economic development. The purpose of this study is to consider the determinants of exchange rates system choice, which indicates the theoretical approach with the country choices. The result found that the choice of an exchange rate system has the role of the disturbance to the economy. It suggests that the money shock s are the key of exchange rate system choice in an economy, in which it seeks to minimize the fluctuations in the country price levels. It also suggests that the greater the price shocks the more is a float, so it affects greatly domestic money shocks. Lothian and Taylor (1996) examine the real exchange rate behavior, and explain the variations in sample of stationary univariate equations in real exchange rates. The study investigates the additional insight in the exchange rates behavior that can be gained by considering the floating rate from the perspective of the data. These issues can be best understood on the subject of real exchange rates stability among the currencies of the major developed countries. Some of the pre-float studies support the fairly stable exchange rates in the long run. Subsequently, Dornbusch (1976), and Frenkel (1981), gave largely as the result of studies published, and reject the hypothesis of random walk performance of real exchange rates. The PPP shows the empirical movements in real exchange rates were highly persistent and effective. Although the PPP is reject the hypothesis of non-stationary behavior of exchange rates in long run. The result of this study shows that the longest span of two countrie s exchange rates are significantly mean reverting. The first model result indicates the 80 percent of the variation in the exchange rates of the history data of two countries. By using of another model, the results explaining the performance of remarkably well in the floating, so that this model produce better forecasts of the actual exchange rates. In line with recent studies, it fined that this process of mean reverting is quit slow, with estimated adjustment of data. In the long run the PPP equilibrium is remaining a useful empirical approximation. Gerlach (1988) examine the dynamic interrelationship between innovations in monthly industrial production in a set of economies, specifically this study attempt the output fluctuations that have been correlated during the periods of fixed and flexible exchange rates. The current has to manage exchange rates flexibility that has reduces the interdependence across countries. It should follow the recent article of Flood and Hodrick (1986) in which it is argued that the variability have been higher during a regime of fixed exchange rates instead of flexible exchange rates, but the conclusion of author is striking so sharply. The results of this study of multiple country output movements under fixed and flexible exchange rates are clear. The variances of growth rates should be higher in the flexible exchange rates and in the fixed exchange rates periods. These variances are statistically significant related to the degree of openness and national income. Thirdly the output movements are co rrelated across countries under exchange rate regime, particularly the co movements in output are more important in the business cycle frequently during the recent years of managed exchange rates flexibility. CHAPTER 3: RESEARCH METHODS 3.1 Method of Data Collection The Data of Consumer price index (Inflation) has been collected from federal bureau of statistics while the data of exchange rate has been collected from Pacific Exchange Rate Service, both are the secondary, published source of data. 3.2 Sampling Technique The sampling technique that has been applicable is à ¢Ã¢â€š ¬Ã…“convenience samplingà ¢Ã¢â€š ¬? as it is easily accessible to collect the relevant information from the source and it is inexpensive and hence, gets a gross estimate of the results. (What is The Advantage of Convenience Sampling, 2007-2010). 3.3 Sample size The sample size is selected on the basis of limitations and scope of the research therefore, Last 54 years i.e., 1947 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 2010, data of inflation and exchange rate is decided to be examined. 3.4 Research Model developed From the above defined and explanations of both the dependent i.e. inflation and independent i.e. exchange rates variables and also discussing the effects of exchange rate on inflation and how it have affects on economic of a country. In this study first analysis is the correlation between these two variables, and identifies the significant relationship. Then it analyzes and evaluates the empirical investigation in regression model as a statistical tool. The simple regression model which can be defined in the equation that represented below: Inflation = ÃŽÂ ²Ãƒ Ã‚ ¾ + ÃŽÂ ²(exchange rate) + ÃŽÂ µ Whereas, ÃŽÂ ²Ãƒ Ã‚ ¾ = the intercept of the equation. ÃŽÂ ² (exchange rate) = the changing coefficient of exchange rate. ÃŽÂ µ = the error term of the equation. From the above explained model, the study develop the following estimation and used for the establishment of the model. Therefore, all the compatible data has entered in to SPSS for statistical analysis. 3.5 Statistical Technique The statistical test that has been applied is single linear regression. This is because only one independent variable and one dependent variable to be used in this research. Frankel (1979) defined that most of the recent work on floating exchange rate goes under the name of the monetary or asset view. The exchange rate is moving to equilibrate the international demand for assets, rather than the international demand for the flow of goods. But with the asset view there is à ¢Ã¢â€š ¬Ã‹Å"Chicago Theoryà ¢Ã¢â€š ¬Ã¢â€ž ¢ in which assumes that prices are perfectly flexible. As the consequences when nominal interest rate changes, it has also reflect the changes in expected inflation rate, so as the domestic currency expected to lose value through inflation and depreciation. This is the rise in the exchange rates and gets the positive relationship between positive exchange rate and inflation. CHAPTER 4: RESULTS 4.1 Findings and Interpretation of the result The simple linear regression technique is used to determine the explanation of dependent variable i.e. inflation due to independent variable i.e. exchange rate. The analysis of the result is defined below: Table à ¢Ã¢â€š ¬Ã¢â‚¬Å" 4.1 Model Summary Model R Square Adj. R Square F Sig. 1 .226 .211 15.207 .000 The table à ¢Ã¢â€š ¬Ã¢â‚¬Å" 4.1 shows that the regression model is best fit to predict as F test value is significant. The variation of regression model is explained by 22.6% i.e. the change in inflation is 22.6% by the exchange rate. Table à ¢Ã¢â€š ¬Ã¢â‚¬Å"4.2 Coefficients Model Un-standardized Coefficients Standardized Coefficients T Sig. B Std. Error Beta 1(Constant) Exchange Rate 121.725 .794 6.887 .204 .476 17.673 3.900 .000 .000 Table à ¢Ã¢â€š ¬Ã¢â‚¬Å" 4.2 the coefficients results show that there is the positive affiliation between exchange rates with related to inflation in Pakistan. The results reflect that the exchange rates beta has the positive value and the T-value of both the variables is significant statistically at 0.05. From the above applied regression model, the result concludes in the way that it explains the relationship of both the dependent and independent variables significantly. The Inflation and exchange rates result shows that the beta value of the variable and T-value is significant at the 0.000 level. So the results conclude that the exchange rates value should significantly play its role in the relationship with related to inflation, but the exchange rates should not individually play a significant role in the relationship with inflation. The hypothesis is not rejected and that the exchange rate explains the inflation by 22.6%. The equation of regression model is written below: Inflation = 121.725 + 0.794 (exchange rate) + ÃŽÂ µ 4.3 Hypothesis Assessment Summary Hypothesis R Square F Sig. Regression Coefficient ÃŽÂ ² T Empirical Conclusion Exchange rate explains inflation. .226 15.207 P .794 3.900 Accepted The hypothesis of this study is that exchange rate explains the inflation, which is being accepted and exchange rate is explaining inflation by 22.6%. These findings support to recent theories that suggested the foreign exchange market efficiency with the existence of risk at equilibrium. Wihlborg (1982) examined the relation of interest rates, exchange rate and currency risks in this study. It identifies the test which empirically shows the impact of currency on interest rates and exchange rates. In this study there are three different ways in which the importance of currency risks for interest rate and exchange rate determination. The results presented here that substantiate the changes in the level of currency risk have a non-negligible impact on the changes of exchange rates and on rates of interest of relative between currencies. CHAPTER 5: CONCLUSION, DISCUSSIONS, IMPLICATIONS AND FUTURE RESEARCH 5.1 Conclusion This study is concluded to examine the dependency of exchange rate on inflation by using the data of consumer price index (CPI) as inflation and the data of exchange rate on yearly basis. The result of this study is highly significant so that the hypothesis of this study is not rejected. The result shows that 22.6% variation in inflation is due to the exchange rate in Pakistan. The analysis of this study also shows that if exchange rate becomes zero, the inflation exist to some extent. For example, if one unit of exchange rate increases, the inflation increases only by 0.794 times. 5.2 Discussions This study has applied exchange rate as independent variable and consumer price index (CPI) as dependent variable. For the availability of data, all the data should be available on daily monthly and yearly basis, but the data is used in order to consistent as yearly basis. The regression model has been formulated for these variable relationship investigations. The study developed the hypothesis that the exchange rate explains the inflation in Pakistan, and the findings are supported by the analysis done by Balassa (1964), Meese Rogoff (1983), Frankel (1979), and Mc Callum (1999) etc. 5.3 Implications and The result also accompanies that the exchange rates are the strength of character of foreign exchange market in Pakistan, and it should effect on each of the related variables as an inflationary basis. Therefore the State Bank of Pakistan and Government officials should realize the role of exchange rates in the economy and try to maintain exchange rates to stop or decrease the consumer price index in Pakistan, so that the price range of every thing should be in range of common men. Also Government should addres