writing
The following are the two samples on how to write introduction of a research
proposal. See also the link at the end for additional sample
1) Introduction The market of credit derivatives originated in the early 1990s, and started to grow rapidly in the
late 1990s. In 2000 the total notional principal for all outstanding credit derivatives contracts was
about $800 billion, which increased to over $20 trillion in June 2006. A study of the International
Swaps and Derivatives Association shows that in the summer of 2008, the notional outstanding of
credit default swaps, the most popular credit derivative, amounted over $54 trillion.
With the rapid growth of the credit derivative market, academics and practitioners have shown
interest in the debate whether or not derivatives increase or decrease the financial stability. In the
literature, there is no unambiguous answer to this question. Many writers, e.g., Rule (2001), argue
that credit derivatives should render the global financial system more resilient, since it allows
banks to transfer credit risks. Credit derivatives allow the origination of and funding of credit to
be separated from the efficient allocation of the resulting credit risk. New investors are now able
to enter the credit market; and these new participants with differing risk management and
investment objectives (including other banks seeking portfolio diversification), help to mitigate
and absorb shocks to the financial system. Most of these researchers acknowledge that the credit
transfer markets present some challenges.
Other researchers, e.g., Instefjod (2001) and Heyde and Neyer (2007), raised concerns about the
impact on market stability of the explosive growth in the number of risk hedging instruments.
Banks may change their behaviour as a result of the existence credit derivatives. Bank loans were
(partly) illiquid since they could only be sold at a discount of their economic value. This created a
motive for banks to limit their risks in order to reduce the chance of illiquidity. With the
introduction of credit derivatives, the banks assets became more liquid, reducing the banks
vulnerability to liquidity shocks, which in turn allowed them to play the risk acquisition game
more aggressively. Risk exposures become more attractive, knowing that they can be offloaded
more easily in times of need.
These views are consistent with the empirical work of Cebenoyan and Strahan (2004), who provide
evidence that banks who manage their risks in a loan sale market hold a larger share of their
portfolio in risky assets than banks inactive in loan sale.
The current economic crisis has intensified the debate of the effect of credit derivatives on the
financial stability. The financial crisis emerged in 2007, when the U.S. subprime mortgage markets
collapsed and global money markets were under pressure. The U.S. subprime mortgage crisis
manifested itself first through liquidity issues in the banking system leading to a sharp decline in
demand for asset backed securities. Hard-to-value structured products and other complex financial
instruments had to be severely marked down. Many established financial institutions (i.e. Lehman
Brothers, Merril Lynch and many more) failed and were taken over or bailed out by the
government.
The aim of this research is to find whether there is a conclusive correlation between the exponential
growth in the trading volume of credit derivatives and the stability of the financial sector. To do
so, we will empirically investigate the following question:
“Does the growth of the market for credit derivatives decrease the stability of the financial sector,
measured by default probabilities of financial institutions?”
2) Introduction
Dairy and beef products belong to New Zealand’s main export commodities, accounting for 22%
of total merchandise exports (Statistics New Zealand, 2004). The European Union (EU) is
commonly known for distorting international trade in these products through subsidised
production and exports. This leads to lower world market prices and hence lower export revenues
for New Zealand (NZ).
The Common Agricultural Policy (CAP) of the EU has already undergone several reforms since
its beginnings in 1962. It was established partly in order to ensure food supply in Europe in the
post World War II period. At this time, the countries of the present EU have been net importers of
agricultural commodities. The principle used in the CAP was to support farmers through the
market rather than by direct subsidies. This was achieved by the creation of a protected unified
market within the Union where domestic agricultural products were given preference. Minimum
prices were established and high often prohibitive tariffs for imported products. European farmers
responded quickly to the high domestic prices and increased production. This was favoured by fast
increasing agricultural productivity through the development of new technologies in the 1960s and
1970s.
The consequence was that the European Union switched from a net importer of food products to a
net exporter in the late 1970s. Nevertheless, the policy did not change at this time and significant
surpluses resulted. Agricultural surplus was (and still is) disposed of on the world markets by the
aid of export subsidies. Export subsidies are necessary in order to offset the difference between
the high domestic prices with the lower world market prices. Since the EU is a major exporter in
many commodities, the subsidised exports depress world market prices in these commodities
(Gardner, 1996). This can be particularly expected in the markets for dairy products where the EU
is the major global exporter, followed by New Zealand. In the beef market, the EU is the 5 th
largest
exporter, equal to New Zealand.
In order to limit the overproduction, the CAP has undergone several attempts to reforms in the
1980s. The introduction of a milk production quota in 1984 limited the excess supply of milk and
the subsidised exports of dairy products. In addition to the internal difficulties, the CAP has
become the main source of dispute with the EU’s international trading partners since the late 1970s
(Howarth, 2000). High internal budget costs and increasing pressure from other countries during
the Uruguay Round of the GATT gave rise to a major reform of the CAP in 1992. The 1992
MacSharry reform redirected the emphasis of farm support from markets to direct subsidies. The
aim of this reform was to reduce the internal price of EU agricultural products, without
undermining farm incomes. This was achieved by a cut in the domestic prices for cereals and beef
and the introduction of direct aid payments to farmers to compensate for the impact of price cuts
on farm incomes. The direct payments introduced in 1992 have been coupled to production, which
means that farmers had to produce a certain crop/livestock product in order to get subsides. In the
beef sector, direct payments were based on the livestock numbers, so the more cattle farmers had
the more subsidies they got. The MacSharry reform made no change to the support of the dairy
sector.
The planned EU enlargement and the continuing WTO trade negotiations towards further
liberalisation were the reasons for a further CAP reform in 1999. The Agenda 2000 reforms
brought price cuts in the cereal, beef and dairy sectors, starting in 2005. Coupled direct payments
were introduced in the milk sector and increased in the beef and cereal sectors, respectively.
Agenda 2000 was the set of reforms which not only dealt with CAP reform but also the future
financing of the CAP, the structure funds, EU enlargement; and most radically it replaced the
original objectives of the CAP with a set of objectives for a rural policy. Rural development has
officially become the ‘second pillar’ of the CAP.
The mid-term review of Agenda 2000 resulted in a new fundamental reform. The 2003 reform
(also referred as the ‘Luxembourg Agreement’ or ‘Fischler reforms’) of the CAP introduced a new
system of single farm payments (SFP) and cut - at least partially - the link between support and
production. The SFP is delivered to farmers irrespective of what and how much they produce
(hence ‘decoupled’ from production) and it is based on historical entitlements. The main purposes
of the new SFP scheme are to support farm incomes and – at the same time - to allow farmers to
become more market oriented, giving them the incentives to produce for consumers’ demand
rather than for CAP subsidies. However, Member States could choose individually to maintain a
limited link between subsidy and production within clear limits. This is a new development of the
CAP towards re-nationalisation of agricultural policy in the EU.
The recent reforms of the CAP also take other concerns into account, such as food safety and the
environment. In order to receive the SFP, farmers must maintain their land in good agricultural
condition and comply with standards on public health, animal and plant health, the environment
and animal welfare (cross-compliance). Further details of the implementation of the 2003 CAP
reform are explained in chapter 1.2.
The principle of the SFP has been used for other reforms of Common Market Organisations in
products which haven’t been affected by the 2003 reform. The ‘2nd wave of CAP reform’ in 2004
introduced the SFP in the tobacco, hops, olive oil and cotton sectors. In the sugar sector, a reform
was adopted in February 2006 and compensatory aids for sugar beet growers will be integrated in
the SFP. Currently, the reform of the common market organisation in wine and fruit and vegetables
is under discussion. Several reform options are assessed until end of 2006, but they will be in line
with the principles of the 2003 CAP reform.
The EU has changed significantly the way how it supports its farmers during the last 15 years.
Direct support schemes, introduced in 1992, have now been at least partially decoupled. The 2003
reform of the CAP enables a shift of a great part of farm support from the WTO blue box to the
green box (European Commission, 2006a). Green box subsidies “must not distort trade, or at most
cause minimal distortion” (WTO, 2006). However, subsidies that try to decouple payment from
output levels may have the effect of keeping production in existence when the optimal solution
may be for it to cease altogether (OECD, 2003). This means that even the new single farm payment
scheme might contribute to distort production in the EU and its international trade. In particular
its implementation in some countries is not fully decoupled.
The main objective of this paper is to look at the implementation of the SFP across Member
States and assess the implications of the CAP reform on New Zealand dairy and beef sectors.
3. Introduction and background of the study Examination of the economic growth and human development relationship mechanisms help the policy and decision makers to formulate and implement relevant poverty eradication strategies. The research found out how economic growth influences the human development and it is vice
versa.
The research used the broaden definition of human development, to encompass the human development index, inequality-adjusted human development index and gender inequality index. The research aimed to explore the link mechanisms between economic growth and human development with view to identifying significant policies and prioritizing sequences of policies.
Can we aim for growth and expect human development to occur automatically or it is vice versa or for both? Are there conflicts, which is most important? Decision makers now are able to answer these decisional questions.
A study on economic growth and human development is a hitting issue to researchers that should be adheres to. To understand the key determinants of human development or economic
growth helps decision makers on setting the proper poverty eradication strategies in the developing countries. Researchers try to investigate the connection of an economic growth and human development. One of the debatable question for economists and researchers is that of, is there any relationships between economic growth and human development? The aim of this question was to know if the economic growth influences the human development and if it is vice versa. Human development has broadened its definition to cover various human needs, economically, socially and politically. The broadening of this concept makes hard to prove empirically the relationship mechanisms between economic growth and the human
development.
The research aimed to test empirically the relationship mechanism between economic growth and human development in its broadening view. The research conducted in two ways chain
relations examinations to make a thorough investigation. The first way chain relation examination was to determine how the economic growth influences the human development by examining the relationship between growth national income (GNI) per capita and indices of human development. The second way chain relation examination was to determine how the
human development influences the economic growth.
Knowing the key determinants of human development or economic growth fosters the implementation of the National Strategy for Growth and Reduction of Poverty (NSGRP) for any developing countries in the world. The research found out how the economic growth influences the human development and how the human development influences the economic growth.
Most recent researches on the economic growth and development found that the most developed countries are those with the highest GNI per capita. Clearly, though GNI per capita doesn't tell the whole profile of human development. GNI per capita is calculated by dividing GNI by the population. It says nothing about how incomes are distributed or spent. Growth in GNI per capita could result from growth in the incomes of richer groups in society, with incomes of
poorer groups remaining largely unchanged.
It coincides with spending patterns that are skewed towards the rich and which exclude the needs of the poor. It doesn't necessarily follow that growth in per capita GNI will lead to a reduction in poverty or to broader social and economic development. Indeed, there are those who argue, rightly or wrongly, that in many countries economic growth is associated with
increasing levels of poverty, rather than the reverse. Economic growth is a necessary (but not sufficient) condition for sustainable poverty reduction (URT, 2002).
The relationship between economic growth and human development is a hotly debated topic, about which people are much divided. Some people highlight the negative effect of growth on low income groups, stressing the need for new approaches to economic development that will
allow the poor to benefit more from economic growth than they do at present.
Much of the debate in this area revolves around the values and ideals of those engaged in it, as well as the different theories on the subject. It also hinges upon interpretations of the empirical evidence. Poverty and income distribution are hard to measure, especially in developing countries where the capacity to gather and analyze data is often very weak. Consequently, the
strength of the statistical relationship between growth and human development remains the
subject of debate. There is also controversy about the mechanisms by which economic growth may reduce poverty, the timing of these and the policy implications.
The following link will also give additional sample.
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.504.2180&rep=rep1&type=pdf