The tate gallery Essay Example | Topics and Well Written Essays - 1000 words

The tate gallery - Essay Example This is where marketing comes in handy. Marketing is a very important function of any business. Marketing involves identifying the customer needs and then making products that will satisfy those needs (Kotler et al 2007). Marketing is very important and beneficial to all the parties since the consumer will be provided with the goods he or she needs while the producer or seller will sell most if not all of the products since the products are produced as per the demand (Scott, 2008). The Tate Gallery uses marketing in advertising its artwork. They send out staff that studies the market and then brings the results. An area of study could be: prevailing conditions in the market (Kotler et al 2006). The Gallery then advertises those artworks which are most likely to attract the attention of the public. The artworks could be those that represent the current situations faced by various countries or the world in general (New York Times, 2009). The public’s curiosity will be stirred and they will want to see more of what the art Gallery has. This will draw more customers to the Gallery (Chamot et al 1964). Marketing is characterised with the marketing mix which is also commonly referred to as the 4Ps (Kotler et al 2007). These Ps include price, place, product and promotion. Price is that amount that is charged on a product. Price is determined by factors such as buyers perception of the value of the product, costs of the raw materials, level of competition, market share etc. Product is defined as that object or service that is produced in large numbers. Examples of products are the art paintings, sculptures etc. Examples of services are the hotel service, tourism etc. Place is the site at which the product is bought; the place maybe a physical location or a virtual location. Promotion is the means through which the marketer communicates any kind of information that will help him or her in his or her job. There are four major aspects

Blog Essay Example | Topics and Well Written Essays - 250 words

Blog - Essay Example Generally speaking BBC has the responsibility of telecasting news in a genuine manner with accurate news content. It also has the responsibility to enhance creativity and promote skill of future generation in media profession. There are also difference between quality and popular newspaper where the former projects international and national news but will have politically biased content while popular papers are consumed by readers who are minorly educated. Language and layout of quality paper is precise whereas popular paper gives news in fancy layout and less authentic language. It could be said that the quality of journalism has increased due to the arrival of social media. The diversity of news broadcasting also has increased with the incoming of social media. Moreover users can research their news related and also can broadcast through blogs and updates in social networking sites. However it is sad that in my home country government does censor the press and regulate news which is

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

Kmart - Case Study Example By bringing down its operational costs an organization can offer its products and services at lower prices. It can also earn higher profits because either the profit margins are greater or the sales volume has increased. Thus an organization which follows an overall lower cost strategy can gain an edge over its competitors. Cost leadership strategy works well for the company in the event of a price war in the industry. (Kotler, 2006) Another strategy followed by Wal-Mart was differentiation focus strategy. Underneath this strategy, Wal-Mart introduced its stores in rural and suburban areas. (Wheelen& Hunger, 2008) By utilizing differentiation focus strategy a firm differentiates its products from that of its competitors based on some attributes that allow the consumers to perceive the products as different from its competitors. A firm looks for differentiation in a particular segmented target market. Target and Kohl’s followed differentiation strategy. Target and Kohl’s applied value proposition in which these companies communicated the benefits they can deliver to the customers. Target flourished well because it provided products at low prices with high quality catering to youth in urban areas. (Wheelen& Hunger, 2008) 2. The amalgamation of both lower cost strategy and differentiation focus strategy were most effective. This can be exemplified by Wal-Mart that utilized both and became the leading story in the retail sector. The lower price of Wal-Mart creates a barrier for the new entrants as these new entrants cannot break through the cost advantage of the leader. The Wal-Marts differentiation focus allowed it to concentrate on the particular needs of a segmented market more efficiently as compared to its competitors. (Wheelen& Hunger, 2008) Lower Cost Strategy: In the presence of leaders like Wal-Mart and Target, Kmart has little alternatives in making pricing strategy to match up with these leaders.

Group Decision-making Techniques Recommended to Lieutenant Coleman J Case Study - 1

Group Decision-making Techniques Recommended to Lieutenant Coleman J. Karras - Case Study Example Brainstorming would be the perfect way to get things started for Mr. Karras with his group as he doesn’t have much idea about his new graphic arts department. It would be better if he complies strictly with Osborn’s method of brainstorming in an orthodox fashion.   Withholding criticism, combining and improving ideas, welcoming unusual ideas and focusing on quantity will be the most effective four principles that can be incorporated into this task. The situation demands to work in a group where Mr. Karras doesn’t have much idea about the bureau and what works and what doesn’t, therefore the only way for him to have a say is without anyone criticizing to his ideas on the spot because when that happens, it stops the flow of new ideas, bad ideas can be sifted out later on. And it is always a good plan to merge raw ideas and make them converge to form one big idea. As far as welcoming unusual ideas are concerned, that is much needed as much is expected of Mr. Karras if he wants to live up to his reputation. This bureau is a laughing stock for the police department and a lot of work needs to be done towards improvement, therefore without some unusual ideas that are both efficient and feasible, setting things right will take a lot of time and that can damage the name of Mr. Karras. Focusing on quantity will deliver quick measurable results. Mr. Karras just need to make sure that reviewing of group ideas should discard t he bad suggestions. The results will be achieved better by brainstorming than using any other group decision-making technique like the Nominal Group Technique and Delphi Technique as both require some form of expert reasoning in the initial stages and Mr. Karras is quite new to this department. Brainstorming will help get the graphics art bureau back on track. It is the fastest method to innovate something in an old department that had been abandoned due to lack of appropriate management techniques.  Ã‚  

Time management Essay Example for Free

Time management Essay In this paper we are going to discuss the effects of time management and how it can help you in your daily activities. Time management is very important in many aspects of our lives whether it’s doing schoolwork, getting ready for work, or getting the kids ready for their sporting events. As one can see time management has many different effects on our lives, both as adults and as an adolescent. Therefore, using time management in our daily lives helps us every day and one will see the effects that it has on us even if we don’t know how to manage our time efficiently and effortlessly. Time management can be used in many different ways throughout the day. When managing our time during the day, often people will try to keep you from finishing your duties in a timely manner. However, discussing time management one will see how it will help them in many of their daily activities and the effects that it has. Time Management affects us in many ways throughout our daily lives. Sometimes time management can affect us by people stopping us on the way to work, while we are on a phone call, or even that last minute thing that has to be done before we can leave. We have to manage our time daily, such as when we first wake up for the day, to start getting ready for work or even to get our day started. Managing our time effectively during the day is a soft skill that not many people have and are able to us effectively. It is often said that study has shown that self-management in the setting of adolescents with disabilities showed that there were many variations among these people(DiPipi-Hoy, Caroline; Jitendra, Asha K; Kern, Lee pgs. 145-159). However, time management and self-management affects those with disabilities and it also affects those that don’t have any disabilities. Most of us have problems with time management, whereas with others it comes fairly easy because they have things written down on calendars, daily planners or even have reminders stored in their phones. In today’s society it is hard to manage our time wisely and efficiently because there are many daily activities that are going on throughout the day that affects them from managing their time appropriately. However, those with certain disabilities find it harder to manage their time better than others. In 2004 there was a mandated Individuals with Disabilities Act, which required schools to include transition goals in what is called an Individualized Education Program by the age of 16(DiPipi-Hoy, Caroline; Jitendra, Asha K; Kern, Lee pgs145-159). Time management affects many different people in many different ways daily, because they are not able to break things down so that they can get the things done that they need to do and be able to do them in a timely manner. With today’s society it is harder to manage our time efficiently because throughout the day we have many things that go on. Time Management can help us in many different ways throughout our daily activities. Time manage is a soft skill that we obtain throughout our lifetime, it helps us as individuals mange what and how we do things during the day. Although, while using it one can see that he or she doesn’t have enough time in one day to get everything done at one time. However, to manage our time as individuals, we would need to break up our daily activities into many smaller time frames throughout the day so that we are able to complete them in a timely manner. What one will see is that time management is not only a soft skill it is also a hard skill that they learn over the duration of their lifetime. When one uses this skill, he or she will see that it often harder at times to make time during the day, to do everything they have to do, and that is why scheduling things around certain times of the day are needed and give it will give you a time frame to get it done. I chose this topic of time management to show the effects of time management and how it will help us in our daily lives. I often find myself running low on time during the day, so what I do is I use a schedule book and reminders to remind myself what I have got to get done and give myself a allotted time to get it done and then I will move onto the next thing. I believe that not only myself but everyone else can build a time management schedule that will help them maintain daily activities throughout their day so that they are able to complete them in a timely manner. When using time management one need to have a set schedule of things that they have to do and give themselves enough time throughout the day. While reading the effects of time management, we have seen what one can do to manage their time efficiently and how to complete their daily activities. Time management is a soft skill that is acquired throughout our lifetime and continues to grow as we grow. However, managing our time with everything that we do during the day maybe hard for us to do, it can be done without any hesitation at all. Time management means to me that one has the ability to manage their time through many things in their lives whether they have a disability or not. In conclusion, time management is stated as follows: the analysis of how working hours are spent and the prioritization of tasks in order to maximize personal efficiency in the http://dictionary. reference. com/browse/time+management? s=t) References DiPipi-Hoy, C. , Jitendra, A. K. , Kern, L. (2009). Effects of time management instruction on adolescents ability to self-manage time in a vocational setting. The Journal of Special Education, 43(3), 145-159. doi:http://dx. doi. org/10. 1177/0022466908317791 http://dictionary. reference. com/browse/time+management? s=t.

Compare and Contrast Poems by John Donne and Michael Drayton Essay Example for Free

Compare and Contrast Poems by John Donne and Michael Drayton Essay The poem, To his coy mistress is very much Carpe Diem but the poet Andrew Marvell who wrote it was influenced by both Metaphysical and Classical types of poetry, the way in the beginning of the poem he seems to talk about things in a very slow way, walking, time slowing down to try to woe the women in a much quicker, the poem also shows a lot of Petrachan influences as when Andrew Marvell says Thine eyes, and on thy forehead gaze and Thy beauty shall no more be found. The poem is very much more in use of words that show the women in which the poem is talking about as being a goddess as I said earlier; this seems to play a large part in the poem. poem which is also very Carpe Diem is, to the virgins, to make much of time, this poem uses irregular (starvea) stress and unstressed words, but does have a regular amount of feet throughout the poem. The poem The Flea is very different to the other two before, it is a metaphysical poem which is much more interesting, it uses a much more dialectic view of wooing a women. It uses the fact that as a flea has bitten both the poet and the women of whom he is in love with, that it means that there are three lives all together in one and that him and his love almost more than maryed are. The structure of the poem uses the end of each paragraph as a conclusion for what it has just been stating. The poem uses imagery as it describes the two lovers together in the Flea with its dark walls of Jet referring to the colour jet black as there is no light in the Flea. At the end of the poem it shows that the women is wanting to kill the flea and he is comparing himself to the flea and saying that the flea is innocent because all it has done is take a tiny prick of blood from her and is it really worth the fleas life. The poet is using the idea of persuasion on the women by using the flea as an example. When it comes to the conclusion of the last paragraph it shows the poets persuasion again for that by the women killing the flea it has taken a small bit of life away rom her as it bit her and took some of her blood. The poet is much more different to the previous poets also as his persuasion has much more of a point to it, and uses a more intelligent argument against the women. The next poem was Song. To Celia, this is a classical poem which emphasises carpe diem is interesting. The poem is not in a common dialectic structure, it does have a felling that the poem is mainly based on the, fast, quick, instant love at the start of the poem. The poem involves a very large part at the end of an affair scene where Ben Johnson writes Of a few household spies? Or his easier ears beguile, this is speaking about the servants of the house in which the women which the man is involved with stays at, that they will only have to trick the servants from seeing them together. The structure of the poem is done using rhyming couplets and a trochaic tetrameter, the poem can be related to, to his Coy Mistress as it is also Carpe Diem. The poem, The Passionate Shepherd to His Love; this poem is a very stereotypical one as it portrays an idealised view of the country, it shows a much pastured view of the countryside. The poem is trochaic and it keeps a steady a,a,b,b pattern. The poet obviously did not have any view of the country and was probably a city person. The poem speaks about him and his love being whisked away into the countryside to live there in peace, with beds of roses for his love. The view of country is very much like a place that would be very hard to find in life; it is a much idealised view. The poem Sonnet is a very strange one; it does not have a set pattern for its rhythm and is very staggered. It involves the poet explaining all the different ways in which he loves the women in speaking. It uses classical influences with the poem having no persuasive felling to it. The poet uses Petrachan factors as the poet says about he loves all the aspects of the women, her breath, loving her freely, and purely.

Economics Essays Petroleum Price Oil Economy

Economics Essays Petroleum Price Oil Economy Petroleum Price Oil and the Economy Summary The vulnerability of oil-importing countries to higher oil prices varies markedly depending on the degree to which they are net importers and the oil intensity of their economies. According to the results of a quantitative exercise carried out by the IEA in collaboration with the OECD Economics Department and with the assistance of the International Monetary Fund Research Department. Euro-zone countries, which are highly dependent on oil imports, suffered the most in the short term, their GDP dropping by 0.5% and inflation rising by 0.5% in 2007. The United States suffered the least, with GDP falling by 0.3%, largely because indigenous production meets a bigger share of its oil needs. Japan’s GDP fell 0.4%, with its relatively low oil intensity compensating to some extent for its almost total dependence on imported oil. In all OECD regions, these losses should start to diminish in the following three years as global trade in non-oil goods and services recovers. This analysis assumes constant exchange rates. Oil prices impact the health of the world economy. Higher oil prices since 1999 – partly the result of OPEC supply-management policies – contributed to the global economic downturn in 2000-2001 and are dampening the current cyclical upturn. World GDP growth may have been at least half a percentage point higher in the last two or three years had prices remained at mid-2001 levels. Current fears of OPEC supply cuts, political tensions in Venezuela and tight stock prices have driven up international crude oil and product prices even further. The adverse economic impact of higher oil prices on oil-importing developing countries is generally even more severe than OECD countries. This is because their economies are more dependent on imported oil are more energy-intensive, and energy is used less efficiently. On average, oil-importing developing countries use more than twice the amount of oil to produce a unit of economic output as do OECD countries. Developing countries are also less able to weather the financial turmoil wrought by higher oil-import costs. India spent $15 billion, equivalent to 3% of its GDP, on oil imports in 2003. This is 16% higher than its 2001 oil-import bill. It is estimated that the loss of GDP averages 0.8% in Asia and 1.6% in very poor highly indebted countries in the year following. The loss of GDP in the Sub-Saharan African countries would be more than 3%. The impact of higher oil prices on economic growth in OPEC countries would depend on a variety of factors, particularly how the windfall revenues are spent. In the long term, however, OPEC oil revenues and GDP are likely to be lower, as higher prices would not fully compensate for lower production. In the IEA’s recent World Energy Investment Outlook, cumulative OPEC revenues are $400 billion lower over the period 2001-2030 under a Restricted Middle East Investment Scenario, in which policies to limit the growth in production in that region lead to on average 20% higher prices, compared to the Reference Scenario. Introduction This paper reviews how oil prices affect the macro-economy and assesses quantitatively the extent to which the economies of OECD and developing countries remain vulnerable to a sustained period of higher oil prices. It summarizes the findings of a quantitative exercise carried out by the IEA in collaboration with the OECD Economics Department and with the assistance of the International Monetary Fund (IMF) Research Department. That work, which made use of the large-scale economic models of all three organizations, constitutes the most up-to-date analysis of the impact of higher oil prices on the global economy. Oil prices have been creeping higher in recent months: the prices of Brent and WTI – the leading benchmark physical crude oils. These price increases and the possibility of further increases in the future have drawn attention again to the threat they pose to the global economy. The next section describes the general mechanism by which higher oil prices affect the global economy. This is followed by a quantitative assessment of the impact of a sustained rise in the oil price on, first, the OECD countries and then on the developing countries and transition economies. Finally the net effect on the global economy is summarized. Oil Price and the Global Economy Oil prices remain an important determinant of global economic performance. Overall, an oil-price increase leads to a transfer of income from importing to exporting countries through a shift in the terms of trade. The magnitude of the direct effect of a given price increase depends on the share of the cost of oil in national income, the degree of dependence on imported oil and the ability of end-users to reduce their consumption and switch away from oil. It also depends on the extent to which gas prices rise in response to an oil-price increase, the gas-intensity of the economy and the impact of higher prices on other forms of energy that compete with or, in the case of electricity, are generated from oil and gas. Naturally, the bigger the oil-price increase and the longer higher prices are sustained, the bigger the macroeconomic impact. For net oil-exporting countries, a price increase directly increases real national income through higher export earnings, though part of this gain would be later offset by losses from lower demand for exports generally due to the economic recession suffered by trading partners. Adjustment effects, which result from real wage, price and structural rigidities in the economy, add to the direct income effect. Higher oil prices lead to inflation increased input costs, reduced non-oil demand and lower investment in net oil importing countries. Tax revenues fall and the budget deficit increases, due to rigidities in government expenditure, which drives interest rates up. Because of resistance to real declines in wages, an oil price increase typically leads to upward pressure on nominal wage levels. Wage pressures together with reduced demand tend to lead to higher short term unemployment. These effects are greater the more abrupt and the more pronounced the price increase and are magnified by the impact of higher prices on consumer and business confidence. An oil-price increase also changes the balance of trade between countries and exchange rates. Net oil-importing countries normally experience deterioration in their balance of payments and putting downward pressure on exchange rates. As a result, imports become more expensive and exports less valuable, leading to a drop in real national income. Without a change in central bank and government monetary policies, the dollar may tend to rise as oil-producing countries’ demand for dollar-denominated international reserve assets grow. The economic and energy-policy response to a combination of higher inflation, higher unemployment, lower exchange rates and lower real output also affects the overall impact on the economy over the longer term. Government policy cannot eliminate the adverse impacts described above but it can minimize them. Similarly, inappropriate policies can worsen them. Overly contractionary monetary and fiscal policies to contain inflationary pressures could exacerbate the recessionary income and unemployment effects. On the other hand, expansionary monetary and fiscal policies may simply delay the fall in real income necessitated by the increase in oil prices, stoke up inflationary pressures and worsen the impact of higher prices in the long run. Impact on OECD Countries OECD countries remain vulnerable to oil-price increases, despite a drop in the region’s net oil imports and an even more marked decline in oil intensity since the first oil shock. Net imports fell by 14% while the amount of oil the OECD used to produce one dollar of real GDP halved between 1973 and 2006. Nonetheless, the region remains heavily dependent on imports to meet its oil needs, amounting to 56% in 2006. Only Canada, Denmark, Mexico, Norway and the United Kingdom are currently net exporting countries. Oil imports are estimated to have cost the region as a whole over $360 billion in 2006 – equivalent to around 1% of GDP. The annual import bill has increased by about 30 % since 2005. Higher oil prices have a significant adverse impact on OECD economic performance in the short term in this case, though their impact in the longer term is more limited (Table 1). The impact on the rate of GDP growth is felt mostly in the first two years as the deterioration in the terms of trade drives down income, which immediately undermines domestic consumption and investment. OECD GDP is 0.4% lower in 2005 and 2006 compared to the base case. In all OECD regions, these losses start to diminish in the following years as global trade in non-oil goods and services recovers. Throughout the whole five-year projection period, GDP is 0.3% lower on average. The impact of higher oil prices on the rate of inflation is more marked. The consumer price index is on average 0.5% higher than in the base case over the five year projection period. The impact on the rate of inflation was felt mostly in 2006 – the second year of higher prices. Recent trends show a clear correlation between oil price movements and short-term changes in the inflation rate. The economic impact of higher oil prices varies considerably across OECD countries, largely according to the degree to which they are net importers of oil. Euro-zone countries, which are highly dependent on oil imports, suffer most in the short term. GDP losses in both Europe and Japan would also exacerbate budget deficits, which are already large (close to 3% on average in the euro-zone and 7% in Japan). The United States suffers the least, largely because indigenous production still meets over 40% of its oil needs. The Impact on Developing Countries The adverse economic impact of higher oil prices on oil-importing developing countries is generally more pronounced than for OECD countries. The economic impact on the poorest and most indebted countries is most severe. On the basis of IMF estimates, the reduction in GDP would amount to more than 1.5% after one year in those countries. The Sub-Saharan African countries within this grouping, with more oil intensive and fragile economies, would suffer an even bigger loss of GDP, of more than 3%. As with OECD countries, dollar exchange rates are assumed to be the same as in the base case. Asia as a whole, which imports the bulk of its oil, would experience a 0.8% fall in economic output and a one percentage point deterioration in its current account balance (expressed as a share of GDP) one year after the price increase. Some countries would suffer much more: the Philippines would lose 1.6% of its GDP in the year following the price increase, and India 1%. China’s GDP would drop 0.8% and its current account surplus, which amounted to around $45 billion in 2006, would decline by $6 billion in the first year. Other Asian countries would see deterioration in their aggregate current account balance of more than $8 billion. Asia would also experience the largest increase in inflation in the first year, on the assumption that the increase in international oil price would be quickly passed through into domestic prices. The inflation rate in China and Thailand would increase by almost one percentage point in 2007. Latin America in general would suffer less from the increase in oil prices than Asia because net oil imports into the region are much smaller. Economic growth in Latin America would be reduced by only 0.2 percentage points. The GDP of transition economies and Africa in aggregate would increase by 0.2 percentage points, as they are net oil-exporting countries. The economies of oil-importing developing countries in Asia and Africa would suffer most from higher oil prices because their economies are more dependent on imported oil. In addition, energy-intensive manufacturing generally accounts for a larger share of their GDP and energy is used less efficiently. On average, oil importing developing countries use more than twice the oil to produce one unit of economic output as do developed countries. The IMF estimates suggest that, in the sustained oil-price increase case, the net trade balance of OPEC countries would improve initially by about $120 billion or around 13% of GDP, taking account of lower global economic growth. Venezuela would gain the least and Iraq and Nigeria the most, reflecting the relative importance of oil in the economy. The impact of higher oil prices on economic growth in OPEC countries would depend on a variety of factors, particularly how the windfall revenues are spent. In the long term, however, OPEC oil revenues and GDP are likely to be lower, as higher prices would not compensate fully for lower production. Higher oil prices in the last four years are in part the result of OPEC’s success in implementing its policy of collectively constraining production. This policy has led to a decline in OPEC’s share of world oil production from 40% in 1999 to 38% in 2003. There is a risk that this policy may be continued in the future, which would limit the extent to which OPEC producers, notably those in the Middle East, contribute to meeting rising world oil demand. According to the IEA’s latest World Energy Outlook, OPEC’s market share is projected to rebound to 40% in 2010 and 54% in 2030. In the IEA’s recent World Energy Investment Outlook, cumulative OPEC revenues are $400 billion lower over the period 2001-2030 under a Restricted Middle East Investment Scenario, in which policies to limit the growth in production in that region lead to on average 20% higher prices, compared to the Reference Scenario. Impact on the Global Economy The results of the sustained higher oil price simulation for both the OECD and non- OECD countries suggest that, as has always been the case in the past, the net effect on the global economy would be negative. That is, the economic stimulus provided by higher oil and gas export earnings in OPEC and other exporting countries would be outweighed by the depressive effect of higher prices on economic activity in the importing countries, at least in the first year or two following the price rise. Combining the results of all world regions yields a net fall of around 0.5% in global GDP – equivalent to $ 255 billion in the first year of higher prices. The loss of GDP would diminish somewhat by 2008 as increased demand from oil-exporting countries boosts the exports and GDP of oil-importing countries. The main determinant of the size of the initial net loss of global GDP is how OPEC and other oil-exporting countries spend their windfall oil revenues. The greater the marginal propensity of oil-producing countries to save those revenues, the greater the initial loss of GDP. Both the IMF and OECD simulations assume that oil exporters would spend around 75% of their additional revenues on imported goods and services within three years, which is in line with historical averages. However, this assumption may be too high, given the current state of fiscal balances and external reserves in many oil-exporting countries. In practice, those countries might take advantage of a sharp price increase now to rebuild reserves and reduce foreign and domestic debt. In this case, the adverse impact of higher prices on global economic growth would be more severe. Higher oil prices, by affecting economic activity, corporate earnings and inflation, would also have major implications for financial markets – notably equity values, exchange rates and government financing – even, as assumed here, if there are no changes in monetary policies: International capital market valuations of equity and debt in oil-importing countries would be revised downwards and those in oil-exporting countries upwards. To the extent that the creditworthiness of some importing countries that are already running large current account deficits is called into question, there would be upward pressure on interest rates. Tighter monetary policies to contain inflation would add to this pressure. Currencies would adjust to changes in trade balances. Higher oil prices would lead to a rise in the value of the US dollar, to the extent that oil exporters invest part of their windfall earnings in US dollar dominated assets and that transactions demand for dollars, in which oil is priced, increases. A stronger dollar would raise the cost of servicing the external debt of oil-importing developing countries, as that debt is usually denominated in dollars, exacerbating the economic damage caused by higher oil prices. It would also amplify the impact of higher oil prices in pushing up the oil-import bill at least in the short-term, given the relatively low price-elasticity of oil demand. Past oil shocks provoked debt-management crisis in many developing countries. Fiscal imbalances in oil-importing countries caused by lower income would be exacerbated in those developing countries, like India and Indonesia that continue to provide direct subsidies on oil products to protect poor households and domestic industry. The burden of subsidies tends to grow as international prices rise, adding to the pressure on government budgets and increasing political and social tensions. It is important to bear in mind the limitations of the simulations reported on above. In particular, the results do not take into account the secondary effects of higher oil prices on consumer and business confidence or possible changes in fiscal and monetary policies. The loss of business and consumer confidence resulting from an oil shock could lead to significant shifts in levels and patterns of investment, savings and spending. A loss of confidence and inappropriate policy responses, especially in the oil-importing countries, could amplify the economic effects in the medium term. In addition, neither the OECD’s estimates for member countries nor the IMF’s estimates for the developing countries and transition economies take explicit account of the direct impact of higher oil prices on natural gas prices and the secondary impact on electricity prices, other than through the general rate of inflation. Higher oil prices would undoubtedly drive up the prices of other fuels, magnifying the overall macroeconomic impact. Rising gas use worldwide will increase this impact. Nor does this analysis take into account the macroeconomic damage caused by more volatile oil prices. Short-term price volatility, which has worsened in recent years, complicates economic management and reduces the efficiency of capital allocation. Despite these factors, the results of the analysis presented here give an order-of-magnitude indication of the likely minimum economic repercussions of a sustained period of higher oil prices. Conclusion Oil prices remain a significant macroeconomic variable. Higher prices can still inflict substantial damage on the economies of oil-importing countries and on the global economy as a whole. The surge in prices in 1999-2000 contributed to the slowdown in global economic activity, international trade and investment in 2000- 2001. The disappointing pace of recovery since then is at least partly due to rising oil prices: according to the modeling results, global GDP growth may have been at least half a percentage point higher in the last two or three years had prices remained at mid-2001 levels. The results of the simulations presented in this paper suggest that further increases in oil prices sustained over the medium term would undermine significantly the prospects for continued global economic recovery. Oil importing developing countries would generally suffer the most as their economies are more oil-intensive and less able to weather the financial turmoil wrought by higher oil-import costs. The general economic background to the current run-up in prices is significantly different to previous oil-price shocks, all of which coincided with an economic boom when economies were already overheating. Prices are now rising in a situation of tentative economic revival, excess capacity and low inflation. Firms are less able to pass through higher energy-input costs in higher prices of goods and services because of strong competition in wholesale and retail markets. As a result, higher oil prices have so far eroded profits more than they have pushed up inflation. The consumer price index growth has fallen in almost every OECD country in the past year, from 2.3% to 2.0% in the Euro zone and 2.4% to 1.9% in the United States in the 12 months to December 2003. Deflation in Japan has worsened from -0.3% to 0.4% over the same period. A weaker dollar since 2002 has also offset partly the impact of higher oil prices in many countries, especially in the euro-zone and Japan. The squeeze on profits delayed the recovery in business investment and employment, which began in earnest in 2003 in many parts of the world. In contrast to previous oil shocks, the financial authorities in many countries have so far been able to hold down interest rates without risking an inflationary spiral. Yet the economic threats posed by higher oil prices remain real. Fears of OPEC supply cuts, political tensions in Venezuela and tight stocks have recently driven up international crude oil and product prices even further. Current market conditions are more unstable than normal, in part because of geopolitical uncertainties and because tight product markets – notably for gasoline in the United States – are reinforcing upward pressures on crude prices. The hike of futures prices during the past several months implies that recent oil price rises could be sustained. If that is the case, the macroeconomic consequences for importing countries could be painful, especially in view of the severe budget-deficit problems being experienced in all OECD regions and stubbornly high levels of unemployment in many countries. Fiscal imbalances would worsen, pressure to raise interest rates would grow and the current revival in business and consumer confidence would be cut short, threatening the durability of the current cyclical economic upturn. References Eichengreen, B., Y. Rhee and H. Tong (2004), â€Å"The Impact of China on the Exports of Other Asian Countries,† NBER Working Paper no.10768 (September). Frankel, J. and D. (1999), â€Å"Does Trade Cause Growth?† American Economic Review 89, pp. 379-399. Grubert, H. and J. Mutti (1991), â€Å"Taxes, Tariffs and Transfer Pricing in Multinational Corporate Decision-Making,† Review of Economics and Statistics 73, pp.285-293. Ianchovichina, E. and W. Martin (2005), â€Å"Trade Impacts of China’s WTO Accession,† this volume. Lian, D. (2005), â€Å"Singapore’s Lessons for China,† Morgan Stanley Global Economic Forum (5 May), np. Mody, A., A. Razin and E. Sadka (2002), â€Å"The Role of Information in Driving FDI: Theory and Evidence,† NBER Working Paper no. 9255 (October). Ravenhill, J. (2005), â€Å"Why the East Asian Auto Industry is not Regional,† unpublished manuscript, Australian National University.