The American Era

The American Era Historical Background * The Filipino revolutionists won against the Spaniards who colonized us for more than 300 years. * The Fil-American war resulted in the defeat of Gen. Miguel Malvar in 1903. * The American Rule was influenced by two factors: 1. ) EDUCATION- many were given a chance to study and English was used as the medium of instruction. 2. WRITERS- went through stages of development to acquire enough proficiency in the new language – imitative of the style and the subject matters of the American and European authors * Filipino writers went into all forms of literature like news, reporting, poetry, stories, plays, essays, novels, etc. Their writings clearly depicted their love of country and their longings for independence. * Imitation soon faded, writers began to turn to: native ideas and circumstances- inspiration for their writings.Movement Against the U. S. Colonialism * the printing press was used to block the American culture from entering the P hilippine lifestyle * Newspapers in our different dialects flourished all over the archipelago. * *Writers were given the chance to show and prove the true talent of the Filipinos * *Writers during these period drew ideas from the Propaganda Movement and the Revolutionary Characteristics of Literature During American Regime Three groups of writers contributed to Philippine Literature during this period. * Literature in Spanish The inspiration of Filipino writers in Spanish was Rizal. * Rizal’s two novels (Noli and Fili) contained the best qualities of a novel ever written, in English or in Filipino. * Those who were inspired to write in praise of Rizal were Cecilio Apostol, Fernando Ma. Guerrero, Jesus Balmori, Manuel Bernabe, Claro M. Recto, etc. Example: by Manuel Bernabe Recodar! Ay del alma que recuerde! la quiebra que ha sufrido la ilusion la memoria es la fiera que nos muerde el pobre Corazon English translation: To remember! Poor soul that recordsThe sufferings you und erwent in illusion Memory is the fire that snared My poor heart. * Literature in Tagalog * Florante at Laura of Francisco Balagtas and Urbana at Felisa of Modesto de Castro became the inspiration of the Tagalog writers. * The advent of American period includes (1)Tagalog Drama (2)Tagalog Short Story (3)Tagalog Poetry * Julian Cruz Balmaceda classified three kinds of Tagalog poets. They were: * Poet of the Heart (Makata ng Puso) * Poets of Life (Makata ng Buhay) * Poets of the Stage (Makata ng Tanghalan) * Literature in English We can trace the beginnings of Philippine literature in English with the coming of the Americans thus, this period is divided into three time frames, namely: * The Period of Re-orientation: 1898-1910 * By 1900, English came to be used as a medium of instruction in the public schools. From the American forces were recruited the first teachers of English. * By 1908, the primary and intermediate grades were using English. It was also about this time when UP, the forerunner in the use of English in higher education, was founded. Writers of this period were still adjusting to the newfound freedom after the paralyzing effect of repression of thought and speech under the Spanish regime. * The Period of Imitation: 1910-1925 * By 1919, the UP College Folio published the literary compositions of the first Filipino writers in English. They were the pioneers of in short story writing. * They were then groping their way into imitating American and British models which resulted in a stilted, artificial and unnatural style, lacking vitality and spontaneity. * Writers of this folio included Fernando Maramag, Juan F. Salazar, Jose M.Hernandez, Vicente del Fierro and Francisco Tonogbanua. * The Period of Self-Discovery: 1925-1941 * By this time, Filipino writers had acquired the mastery of English writing. * They now confidently and competently wrote on a lot of subjects although the old-time favorites of love and youth persisted. * They went into all for ms of writings like the novel and the drama. Other Forms of Literature * Ilocano Literature * Pedro Bukaneg: Father of Ilocano Literature. His name was derived from the word Bukaneg meaning Balagtasan. * Claro Caluya: Prince of Ilocano Poets. Known as poet and novelist. Leon Pichay: known as the best Bukanegero (from Bukaneg). Also a poet, novelist, short story writer, dramatist and essayist. * Literature of the Kapampangans (Pampango Literature) * Juan Crisostomo Soto: (Father of Kapampangan Literature). The word CRISOTAN (meaning Balagtasan) in Tagalog is taken from his name. * Aurelio Tolentino: He truly proved his being a Kapampangan in his translation of KAHAPON, NGAYON AT BUKAS into Kapampangan which he called NAPON, NGENI AT BUKAS. * Visayan Literature * Eribert Gumban: (Father of Visayan Literature) He wrote a zarzuela, a moro-moro and a play in Visayan. Magdalena Jalandoni: She devoted her talent to the novel. She wrote ANG MGA TUNUK SAN ISA CA BULACLAC. LITERARY GENRES POE TRY * Written in 3 languges (Filipino, Spanish, English and in the different dialects) * Some known poets were: Maximo KalawPaz Marquez Benitez Carlos P. RomuloMaria Agoncillo Carlos Bulosan Salvador P. Lopez * There were three collection of poems printed, namely: * Filipino Poetry edited by Rodolfo Dato * The English German Anthology of Poets edited by Pablo Laslo * a pre-war collection by Carlos Bulosan ESSAYS Essays during this period improved with years in quality and quantity, in content, in subject and style. * The notable writers of essay during this period were: * Political, social reflective essays * Critical essays * Personal or Familiar essays * The notable writers of essay during this period were: * 1940: Salvador P. Lopez’ Literature and Society * 1940: Camilo Osias – The Filipino Way of Life * 1941: F. B. Icasiano (Mang Kiko) were reprints of the best of Icasiano’s essays in the Sunday Times Magazine under the column From My Nipa Hut. SHORT STORY S hort stories in English of early Filipino fictionists are marked with American style * changed with the founding of the UP Writers Club (1926) whose aim was to enhance and propagate the â€Å"language of Shakespeare† * â€Å"Dead Stars† by Paz Marquez Benitez- was made the landmark of the maturity of the Filipino writer in English * Many writers followed Benitez like: Icasiano Calalang Manuel Arguilla Arturo Rotor * Paz Latorena *STARTED PUBLISHING STORIES MANIFESTING SKILLS IN THEUSE OF THEFORIEGN LANGUAGE & AKEEN FILIPINO SENSIBILITY * The combination of the foreign language and the culture of a Filipino enabled fictionists to roduce great literary works * The public can now relate to the story because the public also experiences what the story has to say and they can now understand the language being used by the writer. Works like: * His Native Soil by Juan C. Laya * How My Brother Leon Brought Home a Wife by Manuel Arguilla * many other stories which depicted the F ilipino life NOVEL * With the founding of the Philippine Writers League in 1936, Filipino writers began discussing the value of literature in the society they lived in. * this move was led by: Salvador P.Lopez whose works centered on proletarian literature * Other novelists of this period are: * Jose Garcia Villa * Francisco Arellana * Fernando Maria Guerrero * Amador Daguio * Sinai Hamada * Ilokano novelists: * Leon Pichay * Hermogenes Belen * Mena Pecson Crisologo (whose â€Å"Mining wenno Ayat ti Kararwa† is considered to be the Ilokano version of Noli Me Tangere) SARSWELA * During this period, SARSWELA GAINED POPULARITY * Most of the sarswelas if not all, are directed against he American imperialists. * Equally remarkable sarswelas durong the period are the works of: * Severino Reyes â€Å"Walang Sugat† Patricio Mariano â€Å"Anak ng Dagat† * Other noted sarswelitas: * Aurelio Tolentino * Juan Abad * Juan Matapang Cruz * Juan Crisostomo Sotto BALAGTASAN * na med after Francisco F. Balagtas * a debate in verse; a political joust * done almost spontaneously between protagonists who debate over the pros and cons of a certain issue * The first ever Balagtasan was held on March 1924 at the Instituto de Mujeres, with Corazon de Jesus and Florentino Collantes as rivals. * Jose Corazon de Jesus as the first ever king of the Balagtasan.

Ancient Polytheistic Religion Compared to Judaism

Ancient polytheistic religion compared to Judaism Ancient polytheistic and Judaism are two of the most opposite beliefs possible. Polytheistic belief is the belief in more than just one god. Polytheism was brought to this world by the ancient Egyptians and the ancient Greeks. The Greek gods often took on the form of being humans while the Egyptian gods were the main cornerstone to their beliefs and religion. Judaism or the belief of Monotheism is the belief in one main god. Monotheism we brought to the world by the Jewish culture. It was originated from the Hebrew bible and is one of the oldest religions still living today.Judaism was a monotheistic religion of the Jews having its spiritual and ethical ideas embodied mainly in the Torah and the Talmud. The Torah and the Talmud are part of the sacred book of the Jews which is the bible. The first civilization appeared to have arisen in Mesopotamia. Mesopotamia was founded by a group of people called the Sumerians during the fourth mil lennium B. C. E. It lies in the Tigris-Euphrates Valley. The Sumerians and their successors were polytheistic which means they worshiped many gods and goddesses. Their Gods and Goddesses were visualized in human form, with human needs and weaknesses.The Mesopotamians believed that the human race was created to serve the gods. The Mesopotamian temples were run like great households where the gods were fed fantastic meals, entertained with music, and honored with ritual. The Mesopotamians had a very gloomy picture of the afterworld. They were confined to a dusty dark netherworld, doomed with hunger and thirst unless someone offered them food or drink. There was no reward in being religious because everyone was in equal misery. Religion played a huge part in the literature and art of Mesopotamia.Poems were told of the deeds of the gods, like how the world was created. Also poems were told of the great hero king Gilgamesh, who tried to escape death by going on a journey to find the sole survivor of the great flood. The religious architecture was in the form of temples in the cities. As the Mesopotamian civilization rose up in the valley of Tigris and Euphrates, the Egyptian civilization was centered on the Nile River. The Egyptians were also a polytheistic religion, in that they believed in many gods. Egyptian Gods have human bodies, with human or animal heads, and wear crowns or thorns.Egyptian Gods were gods of different things such as the sky, sun, earth, and music. The Egyptians worship took place at small shrines; they left offerings to the chosen gods as well as simple prayers. The Egyptians believed that there afterlife was full of dangers, but those dangers could be overcame by magical spells in the Book of the Dead. Also the Egyptians believed in the preservation of the body and that it was essential for the afterlife. The Hittites were an Indo-European, speaking a language that was related to the Greek and Sanskrit.The Hittites adopted Mesopotamian writi ng along with many other aspects of the Mesopotamian culture, including polytheism. The discovery of iron was found in the Hittites region, somewhat before the creation of their kingdom. The discovery led to the making of iron weapons and tools rather than copper ones. The Discovery of the iron led to the beginning of the Iron Age. Other ancient societies that were polytheistic were the Persians, and the Assyrians. The Israelites possessed little worldly power or wealth, but they created a powerful religion, known as Judaism which is a form of monotheism.Judaism was the first and the longest lasting form of monotheism in a world of polytheism. Judaism is a part of two other religions that have played a big role in the history of the world, Christianity and Islam. Monotheism is the belief in one universal god, who was the creator and ruler of the universe. The Jewish God is neither a natural force nor like human beings, or any other kind of creature; he is so elevated that those who believe in him may not picture him in any form. I personally best relate to Judaism and believing in one single god because I practice the religion of Christianity.I believe the words of the bible and how God is said to have created all forms of life and all things. I grew up in a religious family where we attended masses weekly on Sunday mornings and prayed before and after our meals. I believe that the religion you have been raised up into plays a huge role on your worldview that you best identify with. Along with your family I also believe it’s your own personal ethics that play a role in your worldview of religion. Your ethics are based on what you believe is right or wrong.In my religion of being a Catholic, I believe that God created all things and sent Adam and Eve to represent him in man form. I also believe that Jesus Christ died on the cross, rose to heaven and then came back to earth for human salvation and to save us from sin. The reason I don’t believe in Polytheism is because I find it hard to believe that there would be gods for many different parts of our world. I also think that if a God is suppose to be worshipped and treated like an all-mighty that there should only be one person or God treated with the most significant amount of respect.

Effects of Reconstruction on African Americans Essay

Reconstruction had a large impact on African Americans. It was a gateway period for African Americans into American society as equals. Many changes were made that helped them gain rights and acceptance, but it wasn’t an easy change. In the early years of reconstruction, black codes restricted African Americans greatly (Document D), but as reconstruction went on, various acts were passed to help African Americans gain passage into every day society (Document A). From 1865-1866, the Southern governments put Black Codes into place. These were laws that targeted blacks as unequals in society to try and regain white supremacy. Blacks couldn’t vote, purchase land, testify in court against a white man, bear arms (Document D), etc. Blacks were also forced to sign heavy-laboring contracts for work. Black Codes also sparked the emergence of the Ku Klux Klan, or KKK, who killed and lynched large numbers of African Americans and their families (Document G). Radical Republicans began to take action to give southern blacks equal rights in society. In 1866, the Civil Rights Act was passed that granted African Americans national citizenship and entitled them to sue and be sued, give evidence, and buy/sell/inherit land (Document H). Two years later in 1868, the 14th Amendment was ratified which made blacks both national citizens and citizens of the states that they resided (Document I). States now could not discriminate against blacks. From 1867-1877, Radical Republicans led Congress to many new laws promoting equality. The 15th Amendment was passed in 1870 granting black males the right to vote. Thomas Mundy Peterson was the first African American to vote under provisions of the latter (Document E). He voted in a municipal election in Perth Amboy in the same year, 1870. The KKK Act of 1871 made the infringement by private individuals of a person’s civil and political rights a federal crime. The Civil Rights Act of 1875 gave protection to blacks against segregation in public accommodations. Blacks were finally able to participate in southern politics. State constitutional conventions now had black delegates, southern blacks were elected to varied important state and local offices, and all state legislatures had black members. Some of the statewide offices held were governor, lieutenant governor, secretary of state, superintendent of education, state treasurer, senators, and representatives (Document C). Reconstruction introduced sharecropping to the black community. Sharecropping was a system in that blacks rented a plot of land and paid to the plantation owner a certain percentage of the cotton crop, work animals, fertilizer, and seed (Document H). Sharecropping became a system that croppers were greatly exploited in a variety of ways. Planters had a great advantage in the system. They charged high prices and outrageous interest rates for food and clothing purchased by sharecroppers on credit at the plantation store. Various organizations emerged like the Freedman’s Bureau to help African Americans in education, finding respected jobs, and establishing a place in society. The Freedman’s Bureau played a large role in education by donating supplies to school buildings and paying teachers (Document F). Many colleges and universities were also established. By 1876, all but three Southern states were restored to home rule (Document B). Things that may have effected this process were the use of violence by organizations like the KKK and Knights of the White Camelia to terrorize African Americans and their families, the depression of 1873-1877 that devastated Southern states’ credit, tax rolls, and budgets. Obviously, reconstruction had a huge impact on the everyday life of African Americans. African American advances were made that not only helped blacks but the overall feeling of unity in the US. As a result, many blacks began to feel comfortable in society and gain a sense of belonging.

The Conflict between Territorial Integrity and Self-Determination Essay

The Conflict between Territorial Integrity and Self-Determination - Essay Example Such a classic perspective of statehood with respect to territorial integrity has manifested a simmering tension with another international principle. Recent events, equated with the collapse of the USSR, illustrate that the concept of self-determination shows a tendency to conflict with this long-held principle in international law. The embrace of territorial integrity by international law has something to do with international security and stability and there is a gnawing concern that the burgeoning concept of self-determination may pose a challenge to the status quo. Nonetheless, one need not necessarily neutralize or render the other principle void. While territorial integrity still finds relevance in the present times, the world must find a place for self-determination for the purpose of resolving existing conflicts and avoiding the escalation of violence or the eruption of wars. The international community must seek ways to moderate the build-up of tension between these two see mingly contending international principles. Territorial Integrity and Self-Determination: Definition of Concepts The origin of the concept of self-determination can be traced back to the 1789 American Declaration of Independence and later in the 1792 French Declaration. It originally refers to the entitlement endowed to the state by the populace to govern on their behalf with their consent as well as represent them in the international community as a separate, independent and co-equal entity alongside other states (Castellino p.11). Simply put however, self-determination was just perceived as â€Å"the right of nations to sovereign independence† (cited Schwed p. 447) According to the Finnish international law professor Koskenniemi, the concept of national determination can be viewed from two perspectives. The first has a patriotic facet while the other a secessionist element. The first model has a classical or Hobbesean underpinning because it sees the nation as a state and s elf-determination as closely related to the presence or absence of procedural mechanism that the state adopts to allow its citizens to participate in decision-making. Anything outside of this decision-making procedure, therefore, is â€Å"destructive, irrational passion† according to this model (Castellino pp. 9-10). The implication of this perspective is that the state is placed at the center of everything and that self-determination is legitimate only when it preserves the state as an organized body and when it prevents bellum omnium or what Hobbes called â€Å"a war by all against all,† which occurs in the absence of a civilized society (Leviathan Chapter 13). On the other hand, the second model of self-determination has a more romantic underpinning to it as it is largely based on Rousseau’s social contract theory. In this model, procedure is relegated to the background while purpose and goal take center stage. Moreover, this model does not see a nation as me rely an artificial entity, but as an authentic community. Self-determination from this perspective is thus, an expression, rather than a procedure, of the will of the community geared towards the collective good, not necessarily of the state (Castellino pp. 9-10).An example of the classical or Hobbesian model is the Palestinian claim against Israel, while the South Ossenian-Georgia conflict illustrates the romantic or Rousseauesque model. On the other hand, the concept of territorial integrity has underpinnings from the concept of state as a person of international law under the

Pricing the Flagships Essay Example | Topics and Well Written Essays - 250 words

Pricing the Flagships - Essay Example The results show that there are a number of political factors that influence tuition setting. Minority representation in state legislatures effects University policy. Secondly, the results show that tuition charges are linked to unemployment rates (high unemployment, higher tuition), tax revenue (higher revenue, lower tuition) and share of the population aged between 18 and 24 (higher share lower tuition). The authors conclude that there is a link between political representation and post-secondary policy outcomes. The authors argue that unlike the idea of academic integration proposed by Tinto which focuses on the experiences of a student with the academic system and communities, active learning involves the activities that help in academic integration. Therefore, active learning and academic integration are not interchangeable. According to the authors, active learning helps to enhance the students’ understanding of course content, and students who encounter active learning see themselves gaining knowledge. In this study, the authors used a sample of 718 first year students from a private research university to study the influence of active learning on departure/persistence decisions. The authors observed that two major behaviors of active learning greatly influenced social integration: class discussions and higher order thinking. Based on the findings, the authors conclude that faculty classroom behaviors significantly influence the student departure process.

Egonomics Assignment Example | Topics and Well Written Essays - 1000 words

Egonomics - Assignment Example The nature and pattern of human consumption has evolved significantly over the years with a significant move away from goods produced under mass production (initiated by the car maker Henry Ford) towards specialized production and finally customized production. It is not surprising that the focus of many companies today is no longer just the provision of an exceptional quality product or service but one which caters to niches and has the capability of being adapted as per individual requirements of the customer. In other words, personalization and the creation of unique customer experiences has become the new source of gaining competitive advantage in the midst of largely undifferentiated products and services. To set themselves apart from the crowd, consumers are increasingly flocking towards products that others do not have. This is because, as humans, our behavior is more often â€Å"irrational† than rational and that various purchases cannot be explained in the light of ae sthetics, utility of performance. In other words, the fact that most of engage in building and sustaining our self-esteem and self-confidence means that we often pay a price much higher than the actual worth of the product just for the sake of its exclusivity or limited availability. One such example is that of the recent launch of limited number of exclusive Apple iPhone 24 carat gold handsets that cost a fortune ($2853) to consumers (Trivedi).The pricing reflects the exclusivity of the product which, most consumers may find as a cushion to their self-image. Similarly, the LeBron James Limited Edition watch by Audemars Pigue is designed to cater to enthusiasts who would like to own this $51,500 watch (Adams) as a status symbol and to set them apart from the crowd. The high price reflects the (monetary) worth of the owner/consumer which is consistent with psychology that suggests that human beings are prone to engaging in impression management or casting favorable impressions of one self in the society. Furthermore, considering that humans have imperfect knowledge about themselves, they constantly strive for feedback from others (through praise of appreciation) to boost their perception of themselves. An example is of a customer who is praised by his friend for wearing a $51,500 watch and who receives increased attention from others by virtue of this valuable possession. This can be referred to as â€Å"personal branding† or differentiating yourself from other brands or individuals. In other cases, the same may be considered as a â€Å"requirement† as per social benchmarks (Benabou and Tirole). For instance, an individual attending high profile dinner of delegates may consider it as a disgrace to his self-worth to wear anything less than a custom-made designer outfit or designer shoes. Keeping these trends in view, it is no wonder that companies are looking towards the personalization of their service offerings as well. This is commonly known as o ne-on-one marketing or micro-targeting whereby promotional tools such as the e-mail, internet, direct mail, special events and others are used to target customers with specific psychographic profiles or lifestyles. For instance, HSBC posted banner ads on its websites that were highly personalized meaning that the bank offered special â€Å"offers† depending on the account balance of the customer and the content

Industrial Relations in Australia College Essay

Industrial Relations in Australia College - Essay Example Strong economic performance and high standards of living in the life of Australia have owed their tribute to the significant legislative reforms of the work place legislation in the work place relation system. The reforms within the workplace relation has helped to achieve high productivity and a positive growth in wage. Lower rates of industrial disputation has also been an effect of work place relations act. More reforms to increase flexibility and choice for employers and employees in the workplace is a subject of current target. This is due to the fact that other work place relations reform are being preserved by the government as being vital to come up with a legislative frame work relevant to Australia modern work place and the changing nature of work. (Reams, 1994, 101-104). Essentially, this is aimed at increasing Australia economic growth and international competitiveness relative to other regions in the world. The governing role of workplace in Australia is an effort of both the federal and the state legislation. The government of Australia has been fully empowered to make laws about workplace relations governing a range of circumstances including in-relations to Saccos such as; preventing and settling interstate industrial disputes, foreign corporations and trading, alternatively described as financial corporations within Australia, commonwealth employees, interstate and commerce employees in Australian Capital Territory and the Northern Territory. (Irwin, 2001, 106-109). Federal legislations is liable to prevail without inconsistence incase of a situation where the inconsistence is sited between federal and the state legislation in the past disputes between the employers and employees in Australia was a common occurrence requiring the intervention of the federal and state government. This situation at the current has been surmounted by the formation of the Australia Industrial Relation Commission. The positive contribution of this legislation and commission is immensely out spoken. It is at current automatic that Australia work force relation is no longer relying on external intervention in their deliberations but rather to the other side of encouraging employers and employees to reach agreements at the workplace level or at the business enterprise level, which is the principle target of the government. (Lengwwa, Flinterman, 1988, 22-25). The workplace relations' act (1996) played substantial role towards this target: there has been less reliance on wide ranging (Awards) by industrial tribunals for determining pay and conditions of employment. It has also encouraged agreements making at the work place level or business enterprise level and therefore it has become the main way to follow in deliberation towards the determination of the and conditions for the employees within the federal workplace relation systems. (Bischoff, 1985, 93-95). The effectiveness of workplace relations' act of 1996 as rendered Awards merely a sieve of minimum wages and employees' conditions rather than its initial role of determination and prescription

IKEA UK Marketing Analysis Essay Example | Topics and Well Written Essays - 2500 words

IKEA UK Marketing Analysis - Essay Example As the paper stresses the UK furniture and furnishing industry is substantial, thus makes a significant contribution to the UK economy, including the GDP and employment of UK citizens. There are approximately 8,116 companies in the UK furniture and furnishing industry, including retailers, wholesalers, repair, leasing and specialist designers. The furniture and furnishing industry in the UK is segmented into three major sub-sectors based on the different products and markets therein as well as the characteristics of the buyers, including domestic, office and contract sectors. Companies in the UK furniture and furnishing industry often serve more than one market. As the report declares the UK furniture and furnishing industry comprises many micro and small to medium businesses that specialize in furniture, furnishings, retail, repair and design. However, the industry is not well recognized at the political level and does not receive the government support it deserves despite its contribution to the UK economy. Nevertheless, this industry has experienced growth in imports while exports registered a slight fall in the year 2013. China, Germany and Italy are key players and drivers of the import growth while the Republic of Ireland, Germany and France are the main destinations for exports from this industry in the UK. IKEA, UK uses demographic bases including age, sex, family, job type, socioeconomic status and life cycle to segment its markets.

Melting ice glaciers due to global warming Term Paper - 1

Melting ice glaciers due to global warming - Term Paper Example The increase in carbon content in the air has increased the global temperature which has caused glaciers to melt (Kayne). The resulting increase in the sea level is the main cause of hurricanes and cyclones which have endangered life on Earth. The enormous increase of temperature can greatly affect many ecosystems. Most importantly, ice is melting away. The following figure depicts fluctuations in the sea level along with the temperature variations over the last 450,000 years: From the figure, it can be seen that the content of carbon dioxide in the Miocene caused the sea levels to become 25 ft higher as compared to the present day level. The increase in the content of carbon dioxide in the air in the recent years has been so enormous that the global temperature and sea levels did not get sufficient time to increase, and so they could not increase as much as they would have, had the increase of carbon dioxide taken longer. It is noteworthy here that it is not the phenomenon of melting away of the pack ice that causes any rise in the level of sea. Ice that floats in an ocean is lesser in density as compared to water. When it melts, the additional water that goes into the sea is no more than the volume of ice that was originally above the water line. Nonetheless, ice which is on the land does play a big role in adding to the sea level upon melting. Many researches in the past have spoken of a consistent rise in the level of sea. Presently, rate of increase of sea level is about 1.8 Â ± 0.3 mm per annum which makes about 7.4 inches per 100 years (White et al. cited in Deem). The present rate of increase of sea level is dangerous and if the trend sustains over some period of time, sea levels would increase enough to cause damage to the life on land. Many islands particularly the ones which are in the Pacific are greatly endangered by the

What Is Morality Essay Example | Topics and Well Written Essays - 1000 words

What Is Morality - Essay Example ring of pension plans or their complete termination; reductions in health care benefits; and wage stagnation in spite of increased productivity† (Feldman, 2007). Indeed, it is through these ethical issues that a redefinition of the essence of business is important. Specifically, it is crucial to ask: (1) is the essence of business purely based on profitability and growth? And (2) should businesses be regarded as moral agents (and therefore be responsible for their actions)? While it is true that profit drives the business as it sustains business operations, it is not the sole determinant of profitability. Unfortunately, most businesses today solely focus on serving one type of stakeholder—their end consumers—that they fail to consider their other publics: employees, society, and the environment. In this regard, the implementation of the aforementioned ways to cut down costs may actually end up costly for the company, as these may lead to: (1) bad publicity affecting product loyalty; (2) lawsuits being filed to address improper employee treatment; and (3) investment withdrawals by image-sensitive shareholders. All of these examples reinforce the notion that ethical business practices can indeed translate to business profitability. However, it must be pointed out that viewing ethicality as a mere tool for profitability remains conceptually ambiguous, especially when attempting to shed light on their stark differences. This is why revisiting the essence of business is significant in order to glean insights on what the business is and how it should act. To begin, it must be made clear that a company is a ‘separate and self-determining’ entity since it is comprised of human beings who are completely capable of controlling the business—through culture creation, strategic business alignments, and operations planning—in order to achieve its goal of profitability. In this regard, any company is said to be free, and is therefore given its rights and

Servant Leadership Integrative Project Essay Example | Topics and Well Written Essays - 3500 words

Servant Leadership Integrative Project - Essay Example Transformational leadership style is composed of so many components (Margaret 2013). The components of transformational leadership are well highlighted below; Intellectual stimulation This of component transformational style encourages creativity and innovation among the people who follow this style. The transformational leaders challenge the members who follow them and arouse them to identify new gaps and learn from that. The local churches can as well adapt this form of transformational style so that they identify the areas or points that they may need to strengthen to enable them develop and spread the gospel further (Larry 2002). Individualized or subjective consideration Under this component of transformational leadership, it is important to note that the transformational leaders give personal assistance to the individual followers. The followers can access the services they would require from the followers. They have ensured that there is transparency in the means and modes of communication between the leaders and the followers. This has helped as the followers can now see that the leaders acknowledge the efforts that they make towards the team. The local churches have always shown this especially in the cases where the church members would wish to have prayer requests at their residential places and thank God that the God sent servants have never let them down. The servants do this because the word of the Lord is free and to make the members see that the efforts that they put in the church are acknowledged (Mitsuru 2011). Inspirational motivation Transformational leaders have well set goals and missions that have boosted the loyalty of the members. The members therefore have developed a strong passion for the team thereby contributing much for the benefit of the team. In the local churches, the leaders have to be goal oriented of which the goal is spreading the gospel and they should not involve themselves in other activities that can send the people awa y from the Lord. They should therefore conduct themselves in an inspiring and a manner that is quite motivating (Rhonda 2011). Idealized influence Transformational leaders can serve as the moral icons fir their followers. Any move they take will therefore be highly copied and emulated by their followers. It is therefore important to highlight that they should conduct themselves well so that the picture that comes after they are seen is a positive one to the followers. The leaders in the local churches should therefore be on the forefront of inflicting good moral values to the people. This is another way of accomplishing the work of the Lord (Larry 2002). It is very important to highlight that transformational form of leadership has various core values that, are the propulsive forces that that back up the mission as well as the visional duties of the servants of God. The core or rather the main values of transformational style of leadership are highlighted below; Courage Transformati onal style of leadership needs a lot of courage for success to be realized in any mission that you undertake. With this, the servant has to be ready to take the risk and as well bear them. Courage must be supported with good will and positivity in any circumstance you choose to go for. Courageous servants of the biblical work mission have the potential of overcoming any temptation that may come their way. The missionary work of God

Beauty Contest Essay Example for Free

Beauty Contest Essay In the average dictionary beauty is defined as a combination of qualities that pleases aesthetic senses, especially the sight. Unfortunately, in today’s society, the meaning of beauty has become extremely distorted and in place beauty pageants have become very popular. These contests take place across the entire world; in big cities and small towns. The contestants’ ages range from 0 to 30 years old. Thus, children are thrown into this lifestyle, without knowing exactly what they are getting into. They are judged by physical beauty and sometimes personality and talent, with the winners awarded prizes or titles. Many people say that it beauty pageants boost ones confidence but in fact, they increase eating disorders, excessive dieting and can even lower ones self-esteem all because they do not feel as physically attractive as â€Å"they should be†. In more ways than one, beauty pageants significantly impact young girl’s life as she develops into a woman. According to an article by Women’s News, the United States generates approximately 100,000 beauty pageants for young girls and approximately 2.5 million girls compete in them. For most pageants, children are entered into them as soon as they are able to sit up by themselves. This means that from a young age these girls learn that the worth of a person is solely based on appearance, thus enabling them into a vain and insecure individual in the future. Though these pageants host talent portions, they are often flooded with over promiscuous dance routines and outfits, throwing pageant kids into things that are not appropriate for their age. Sadly enough, not every girl that enters a beauty contest can win. So, their parents become very competitive and make them go through tanning, waxing and many make-up and hair sessions, to guarantee that they are the â€Å"best†. However, when these girls do lose, they believe that they were not good enough for the judges and lose all of their self-esteem. These pageant kids now become overly competitive and believe everything is about winning. And even worse, a high percentage of these pageant kids will engage in cosmetic and plastic surgery in the future to maintain their definition of beauty. In addition to low self-esteem, beauty pageants can create many bad habits including excessive dieting. Because the parents of these young girls are very obsessive with their children’s appearance they end up robbing them of their childhood. They are not able to grab a slice of pizza or even a kid’s meal because they are watching every calorie intake. These young girls are forced to go on crash diets, to gain energy and lose weight very quickly. Sadly, this creates a number of problems for their health such as impaired growth, menstrual irregularities, low blood pressure and impaired kidney functions. Unfortunately, many of these parents do not know exactly how they are impacting their children’s bodies. They are not only forming nutritional deficiencies but psychological issues too. According to the National Association of Eating Disorders, 90% of the time, girls who were forced to start a diet from a young age increase the frequency of taking extreme measures to continue a â€Å"perfect† figure, which is very destructive to one’s health. Excessive dieting can lead the way for a more harmful habit, eating disorders. In today’s society, 35% of â€Å"occasional dieters† progress into pathological dieting, (disordered eating) and as many as 25%, advance to full-blown eating disorders (Philadelphia Eating Disorder Examiner, July 2011). When these pageant kids grow into young women, they have all of their eggs stacked in one basket, which in this case will be the â€Å"looks department†. They are so used to concentrating on the external and superficial aspects of beauty that they cannot focus on reality. The longing to be thin like the supermodels on magazine covers, causes these pageant girls to go to extreme measures such as bulimia and anorexia. In one situation, a pageant girl as young as 6 years old was hospitalized with anorexia, which was linked to body image. This is not acceptable at all. But the blame cannot be solely placed on them. Their moms are so obsessed with their image; they allow their children to engage in these horrific activities. There is therefore no doubt that beauty pageants do no good for these kids. In closing, beauty pageants cause a great deal of problems for girls in the long run. These pageants are more likely to hurt one then to help one. These pageants are supposed to boost confidence, when in reality they ruin children’s lives and basically kill their mental beings. I believe that beauty pageants for kids are a form of child abuse. These mothers exploit their children, teaching them that there will always be a person better than them. This is unacceptable and beauty pageants need to be banned because beauty is not counterfeit. It is being confident in your own skin without the approval of others. The time for taking action has come.

Themes Of Eudora Welty

Themes Of Eudora Welty A theme in writing is the main idea of the literary document. By a writer having well written papers with a generalized theme the writer is able to imagine and feel the occurrences within the piece of work. Theme is a main component of any fictional writers work; it is the element of the paper that is reoccurring throughout the piece of work. The theme will always be a subject but not every subject that is found is a theme (Childs and Fowler 239). Eudora Welty is a very strong writer who uses many themes throughout her literary work that is illustrated as racism, responsibility, initiation, coming of age, belonging, as well as many other that are found throughout her literary pieces. A Worn Path is a story with many different themes shown throughout it. It is considered by many to be the best writing that Welty ever did. Because Eudora Welty was a writer from Mississippi in the 1940-1950s most of her writing was influenced by the theme of race and racism. In A Worn Path, Welty shows the theme of race and racism by the encounters in which her characters experience along the story. During the time period in which the story was written, it was common for a Caucasian person to call blacks by aunt, granny, or uncle as a way of labeling them instead of speaking to them as an individual by their name (Wilson 315). Welty often found herself using themes that were influenced by Greek mythology and beliefs (Champion 350). The theme of resurrection is found within A Worn Path by looking into the character of Phoenix. When you examine Greek mythology, you see that a phoenix was a bird that actually rose from its ashes to restart a new life. Just as the phoenix mythological b ird is resurrected, the character Phoenix is resurrected because she refuses to give up and die. Duty and responsibility is seen through A Worn Path as the character Phoenix had a strong sense of duty to take care of her grandson as he has no one else to tend to him. Not only did Phoenix have a sense of duty to care for him, but she felt that it was her responsibility to see he got everything that he needed like when she was determined to make it into town to get the medication that he needed for his throat. The main themes in which sum up A Worn Path are race, duty and responsibility, and resurrection. Welty uses these themes to allow the reader to experience firsthand the struggle in which the characters encounter. Moon Lake is a short story that Eudora Welty wrote in 1947 with the themes of identity, belonging, initiation, and coming of age. In Moon Lake, there are two characters that are prepared to see a new view of what reality is. Loch Morrison, and the girls both experience initiation and they are both connected to the revelation of the male power and energy. Loch Morrison initiation comes from not hunting like most males experience, but instead through the heroism and salvation. This story depicts the theme of coming of age and the group of girls start to notice the lifeguard Loch Morrison as he is ever so careful to stay to himself. Welty speaks of Easter who almost drowns in the lake is rescued by Loch, only for it to be perceived as a sexual act to the other lady. Throughout the entire story Welty speaks of feminine scenes which are reinforced by masculine energy. Identity is within this short story as a whole is applied to the orphan girls who do not have a true sense of who they are . They simply give themselves certain names and identities as does Easter. They are not rooted deeply within the town because they are known as unwanted or outcast. Jinny love on the other hand knows exactly who she is as her identity is defined by the adult world. Her identity is given to her with approval from society. Nina on the other hand is an individual who is not happy being just her, she wants to know what life is like for others. She has a very private sense of her own identity as she feels very isolated(Milne 8). Moon lake has a theme of belonging as all of the orphan girl have a sense of unity being at the camp. They feel as if they all fit in and are needed by each other. The orphans have no other sense of identity except for what they know when they are together at the camp. Belonging to the group of orphans gives them a sense of identity and family that they long for. Eudora Welty has many other stories that she has written with very strong themes. During the end of Weltys life and writing career, she became very cold hearted and defensive about the issue of race. Everywhere she went she was under pressure to address race and she began to resent it (Flower 327).

Effect on Trade Flows of Regional Trade Agreements

Effect on Trade Flows of Regional Trade Agreements Abstract This paper studies the effect on trade flows of RTAs signed between developing economies. It uses a variation of the gravity model of trade to asses five RTAs: Mercosur, The Andean Community, SICA, the EU, Chile-China. Contents Abstract iii List of Figures vi List of Tables vi List of Formulas vi 1. Introduction viii 1.1Background viii 1.2 Problem definition x 1.3 Research Objective x 1.3.1 Major research question x 1.3.2 Minor research question xi 1.4 Theoretical Framework xi 1.4.1 The Gravity model of trade xi 1.4.2 Research Methodology and Design xii 1.4.3 Research Assumptions xii 1.4.4 Research Limitations xii 1.5 Thesis Structure xiii 2. Literature Review xiii 2.1 Trade Creation and Trade Diversion xiv 2.1.1 Trade Creation xiv 2.1.2 Trade Diversion xvii 2.1.3 Gross Trade Creation xviii 2.2 Empirical Evidence from SS RTAs xx 3.Theoretical Framework and Research Methodology xxi 3.1 Theoretical Framework xxi 3.1.1 Multiple Regression Analysis and Model Building xxi 3.1.2 Regression Model Diagnosis xxii 3.1.3 The Gravity Model of Trade xxiii 3.1.4 Research Assumptions xxvii 3.1.5 Research Limitations xxvii 3.2 Research Methodology xxvii 3.2.1 Research Type and Approach xxvii 3.2.2 Data Collection xxx 4. Findings and Results xxxi 4.1 The effect of RTAs xxxi 5. Conclusions xxxiii 6. Appendix xxxiv 7. References xxxvii List of Figures Figure 1 Trade Creation. Figure 2 Trade Diversion Figure 3 Trade Creation Proper vrs. Gross Trade Creation Figure 4 Multiple regression hyperplane List of Tables Table 1 Dummy Variable Interpretation.. Table 2 RTAs assessed and Members Table 3 Regression results of individual years Table 4 Regression results of PCS List of Formulas Formula 1 Gravity model equation Formula 2 Log linear form of the gravity model Formula 3 Current gravity specifications.. Abbreviations CGE: Computable General Equilibrium COMESA: Common Market for Eastern and Southern Africa FTA: Free Trade Agreement GATT: General Agreement on Tariffs and Trade GDP: Gross Domestic Product MERCOSUR: Mercado ComÃÆ' ºn del Sur RTA signed between Brazil, Argentina, Uruguay and Paraguay NAFTA: North American Free Trade Agreement OLS: Ordinary Least Squares PCS: Pooled Cross-Section PTA: Preferential Trade Agreement RIA: Regional Integration Agreement RTA: Regional Trade Agreement SICA: Sistema de IntegraciÃÆ' ³n Centro Americana RTA between Honduras, Costa Rica, El Salvador, Guatemala, Nicaragua Panama and Belize SS: South-South UNCTAD: United Nations Conference on Trade and Development WB: World Bank WITS: World Integrated Trade Solution WTO: World Trade Organization 1. Introduction Background Four hundred and sixty two RTAs have been notified to the WTO up to February 2010 (WTO,2010). From 1948-1994 the GATT received one hundred and twenty four notifications of RTAs, and since its creation in 1995, the WTO has received over 300 RTA notifications, (WTO,2010). This trend of forming trading blocs is likely to become stronger as more RTAs are currently under negotiation. Of particular interest to economists, and the focus of this paper, are South-South RTAs, that is, RTAs signed between countries of low income levels. There are reasons to believe that SS RTAs may not only fail to stimulate economic growth among member countries, but also hinder growth for these countries. In their book Regional Integration and Development, Winters and Schiffer (2003) state that there is some evidence that North-South RTAs stimulate economic growth in the southern partner, little evidence that North-North RTAs stimulate growth and NO evidence that South-South RTAs do so. Specifically they argue that SS RTAs do not provide partners with access to technology or knowledge that is characteristic of rich countries; SS RTAs are unlikely to add credibility to government policies and may even hinder investment if not accompanied by liberalization of trade with the rest of the world; and, SS RTAs are likely to generate only trade diversion and no trade creation Mayda and Steinberg (2006) argue that SS RTAs are unlikely to provide the positive effects of competition and economies of scale because partner countries are both small and poor. In addition, the loss of fiscal revenues harms the member country economies and finally, SS RTAs are more likely to divert trade rather than create trade. Willmore (1976) and Nicholls (1998) make similar points using the Central American Common Market as an example. Trade creation and trade diversion are concepts that were introduced by Jacob Viner in 1950. Both terms refer to the redirection of trade flows as a consequence of an RTA. In trade creation, goods that were previously produced by a local economy are instead imported from more efficient producers in countries within the RTA. Trade diversion refers to the redirecting of trade from the more efficient producer to a less efficient producer within the RTA. In both cases, trade creation and trade diversion, the trade flows are affected by the reduction of tariffs to member countries typical of RTAs. Trade creation and trade diversion are explained with more detail in section 2.1 of this paper. A number of studies have been conducted to assess the effects of SS RTAs in partner countries -most of them attempt to determine if the RTAs were trade creating or trade diverting e.g. Evans (1998), Lewis et al. (1999), Flores (1997), Cernat (2001,2003)), Subramanian and Tamirisa (2001), Mayda and Steinberg (2006). Different methods have been used and the results are mixed. As a reference, this paper focuses on the results of Cernat (2001, 2003), Flores (1997), and Mayda and Steinberg (2006). Different methods were used in these studies and the results were mixed. Cernat (2001) used the log-linear form of the gravity equation to assess nine SS RTAs. He finds evidence that suggests that SS RTAs are less trade diverting than theoretically predicted. Cernat (2001) findings suggest that Mercosur and the Andean Community were overall, trade diverting. On the other hand Flores (1997), using a CGE analysis, concluded that Mercosur was trade creating. Mayda and Steinberg (2006) use a difference-in-difference estimation strategy at commodity level to assess the impact of COMESA on Ugandan imports. They present evidence that South-South trade agreements create positive but little economic gains, through changes in trade patterns, for their members. This is different from Cernat (2001) results, which indicate that imports into COMESA members from third countries were on average 30 per cent higher than those predicted without the trade diversion dummy variable. Mayda and Steinberg (2006) find evidence that no trade diversion takes place in COMESA. The mixed results from these studies, the increasing number of SS RTAs underway and the high number of countries wanting to join completely or in part in these RTAs poses the following questions: Why do policy makers from these countries advocate in favor of these RTAs? Should these RTAs be pursued?, and the still not categorically answered question: Are South-South Regional Trade Agreements trade creating or trade diverting? Using the gravity model, this paper aims to get evidence from SS RTAs from the Americas. 1.2 Problem definition Do South-South Regional Trade Agreements create trade or divert trade? The literature on this topic is vast and contradictory. Everybody thinks that SS-RTAs are trade diverting. Some papers present evidence of this. Other present evidence that they are actually trade creating. Finally others find evidence of very little trade creation and no significant evidence of trade diversion. With so many RTAS in place and many others underway, it is important to understand the effects of creating these trade blocs. Should poor countries pursue RTAs with poor countries? Are SS RTAs building blocks or stumbling stones towards the world liberalization of trade? 1.3 Research Objective The main objective of this paper is to determine if MERCOSUR, Andean Community, and SICA were trade creating or trade diverting in the years 1995, 1998, 1999, 2003, 2007. 1.3.1 Major research question Is there significant evidence of trade creation or trade diversion on the years 1995,1998,1999,2003,2007 for Mercosur, Andean Community and SICA? 1.3.2 Minor research question Is there significant evidence that suggests that RTA members of the above mentioned RTAs increased trade between them and their partners? Is there significant evidence that suggests that members of the above mentioned RTAs increased trade between them and third countries? Is there significant evidence that suggests that the increase in trade between RTA partners of the above mentioned RTAs is higher than the decrease in trade between RTA members and third countries? 1.4 Theoretical Framework 1.4.1 The Gravity model of trade The gravity model uses Newtonian gravity principles to study human behavior. It is widely used by economists and social scientists to predict flows of trade, people, goods, money, and other variables as an effect of changes in economic policies, fiscal policies, new laws, bans and other distortions to the flow of a given variable. The original gravity model of trade assumes that two countries will trade more or less depending on the sizes of their economies and the distance between their economic centers. It was created independently by Tinbergen (1962) and PÃÆ' ¶yhÃÆ' ¶nen (1963) and augmented in later years to include other independent variables that may cause a change in trade flows. These augmented versions of the basic gravity model may include: population of the two countries, presence of common borders, same language, common colonizer, and others that the researcher regards as relevant. The gravity model specifications used in this paper are similar to those of Cernat(2001) and Cheng Hall (2003). These specifications are used to run OLS regressions on trade data of 1995, 1998, 1998, 2003 and 2007. One set of pooled data including the years mentioned is analyzed using the same gravity specifications. The results of these regressions provide evidence of gross trade creation and diversion as specified by Balassa (1967) 1.4.2 Research Methodology and Design The paper uses standard OLS analysis, with bilateral imports as a dependent variable and 17 independent variables: GDP of the importing country, GDP of the exporting country, Population of the importing country and population of the exporting country, distance between the capital cities of each country pair, Intra_x dummy variable for each RTA, Extra_x dummy variable for each RTA. The values of GDPs, distance and populations are used in their logarithmic form. GDPs and population data was collected from the WB databank. Trade data was collected from UNCTADs database using the WB banks WITS application. 1.4.3 Research Assumptions Costs of transportation are proportional to the great circle distance between economic centers of countries studied All countries have one economic center, namely their capital cities. The error coefficient of the log-linear gravity model used in this paper is normally distributed with a mean of zero and constant variance for all observations. It is also assumed that error pairs are uncorrelated. GDPs, population, and trade data collected belongs to the population 1.4.4 Research Limitations 1.5 Thesis Structure The remainder of this paper is organized as follows: Chapter 2 presents a literature review that explains trade creation and trade diversion, the effect of both and findings of previous papers that assess RTAs. Chapter 3 explains the gravity model used on the paper, how data was collected and organized, and the considerations in analyzing data. Chapter 4 summarizes the findings and Chapter 5 concludes. 2. Literature Review There is extensive literature on RTAs. This literature either predicts the effects of a RTAs using a computable-general equilibrium analysis or they measure the effects of an FTA using aggregate data or commodity level data. The concern of most authors, and the reason why they conduct their research, is that FTAs and specially SS FTAs may divert trade rather than create it. In the former case, purchases from an efficient producing country are replaced by purchases of a less efficient FTA partner. This section serves three purposes: 1. It explains trade creation and trade diversion to the reader so she can better understand the methodology used to assess the selected RTAs. 2. It presents the reader with the results of previous findings so that the reader can compare the results of this paper with previous results of other authors. 3. It gross trade creation and diversion so that the reader can understand the results of the research. 2.1 Trade Creation and Trade Diversion Trade creation and trade diversion as defined by Viner (1950), refer to changes in flow of trade between nations. Trade creation happens when trade is switched from less efficient producers of one country to more efficient producers in another country a better allocation of resources. In trade diversion trade is shifted from more efficient producers in one country to less efficient producers in another country -a worsening in the allocation of resources. 2.1.1 Trade Creation Trade creation can be defined as the net welfare gain that results from the initiation of an RTA, both on the production and on the consumption side. Some economists though, think that it is more precise to think of trade creation only as the increase in welfare from the production side (Senior-Nello S, 2010). In this paper the former definition of welfare is considered. To understand trade creation, imagine the following scenario (Figure 1): The country in question, Country X, say Honduras, imports product Q from country M (United States) at price Pw+t, which includes an ad valorem tax and is the same price offered by other nations in the world, including country E (El Salvador). At this price, Honduras imports 20 units and consumes 60. The remaining 40 units are imported from the US. This is illustrated by the Honduran supply and demand lines in Figure 1 and the perfectly elastic supply curve with free trade of El Salvador. It is understood that a change in Honduran imports of product Q cannot affect the world price of product Q. Figure 1. Trade Creation If Honduras signed an RTA with El Salvador and the price of product Q from El Salvador dropped to PE, Honduras would now produce 10 units of product Q, consume 70, and import the difference of 60 units. Because El Salvador now offers a lower price for product Q, Honduras now imports this product from El Salvador and not from the US. The consumer surplus gains of this RTA are represented by areas a+b+c+d. The loss in producer surplus is indicated by area a. The loss of tariff revenue for Honduras is area c. Therefore the net welfare increase of this RTA between El Salvador and Honduras is indicated by triangles b and d. Triangle b represents the amount of production that was shifted from less efficient producers in Honduras to more efficient producers in El Salvador a better allocation of resources. Triangle d represents the increase in consumption of product Q. 2.1.2 Trade Diversion Trade Diversion is illustrated in figure 2. Again the supply and demand lines are those of Honduras for product Q. Line S1 and S2 are the perfectly elastic supply curves of USA and El Salvador respectively, and lines S1+t and S2+t are the tax inclusive supply curves of the same two countries. Figure 2. Trade Diversion Honduras imports product Q from the US at tax inclusive price Pw+t. El Salvador offers product Q at price PE+t and thus does not benefit from Honduran purchases. At price Pw+t Honduras produces 20 units, consumes 60, and imports 40 from the US. If Honduras and El Salvador now form an RTA and do not include the US, tariffs will be removed on imports from El Salvador but not from imports from the US. After forming the RTA Honduras would produce 10 million units, consume 80 million and import 60 million units of product Q from El Salvador at price PE. The RTA has diverted trade from more efficient producers in the US to less efficient producers in El Salvador, so there is a worsening in the allocation of resources. On the other hand 10 million units are now imported from El Salvador instead of being produced at home in Honduras. At the same time 40 million units that were previously imported from the US are now being imported from El Salvador. The welfare loss from trade diversion is reflected rectangle f. The 40 million units that were imported from more efficient producers in the US whose free trade price is $1.00 are now imported from El Salvador at $2.00. The welfare loss is $40 million. The welfare gain from the customs union is calculated as the areas of triangles b and d. Triangle b is the welfare gain in the production side: $5 million. Triangle d is the welfare gain in the consumption side: $10 million. The total impact on welfare as a result of the RTA is given by the sum of the areas of triangles b and d minus the area of rectangle f (b+d-f): welfare gain minus welfare loss. In this case the RTA generated a welfare loss of $25 million. Figure 2 illustrates that the idea of trade creation and trade diversion can be misleading. If, for example, the sum of areas of triangles b and d would be greater than the area of rectangle f, the RTA would cause a net welfare gain. In this scenario, although trade has been diverted from more efficient producers in one country to less efficient producers in another, the RTA increased welfare for the RTA signing country. 2.1.3 Gross Trade Creation Following the lead of Jacob Viner, Balassa (1967) evaluated the effects of the European Common Market with reference to its trade creating and trade diverting effect using Tinbergen (1962) and PÃÆ' ¶yhÃÆ' ¶nen (1963) model -the gravity model. In his work he developed model that captured substitution of less efficient domestic and foreign suppliers for more efficient foreign suppliers gross trade creation; which is different than Viners definition of trade creation according to which trade is created only at the expense of local producers. To illustrate the difference gross trade creation and trade creation proper as defined by Viner (1950), consider three trading partners of one particular product countries A, B, and C, product Q (See Figure 3). Before signing a RTA with country B, Country A imports product Q from both, Country B and Country C in equal amounts and has 4 local producers of the same product (Figure 3a). In the case of trade creation proper (Figure 3b), after signing a RTA with country B, Country A continues to import equal amounts of product Q from countries B and C but has reduced the number of local producers of the same product. More efficient producers in Country B have absorbed market share from local producers in Country A trade creation proper. Gross trade creation on the other hand (Figure 3c), considers that trade is created not only when local producers are substituted, but also when producers in third countries are substituted. In this case, after signing a RTA with country B, Country A decreases its imports of product Q from Country C and increases imports of the same product from Country B while keeping the same number of local producers. It is important to note that gross trade creation assumes that substituted producers in Country C were less efficient than producers in country B; the contrary would constitute trade diversion. Figure 3. Trade Creation Proper vrs Gross Trade Creation Like in Cernat (2001), this paper evaluates the gross trade creating effects of the assessed RTAs. In his paper, Balassa (1967) provides evidence of trade creation in the European Common Market during six years since the Markets establishment. Again, trade creation applies to the substitution of any less efficient producer for a more efficient one, independent of the producers base country. The why of the expected differences between the results of developed country RTAs and SS RTAs is explained in the next section. 2.2 Empirical Evidence from SS RTAs A number of studies have been conducted to assess the effects of SS RTAs in partner countries -most of them attempt to determine if the RTAs were trade creating or trade diverting e.g. Evans (1998), Lewis et al. (1999), Flores (1997), Cernat (2001), Subramanian and Tamirisa (2001), Cernat (2003), Mayda and Steinberg (2006). Different methods have been used and the results are mixed. This paper uses methods similar to Cernat (2001) and Cheng Wall (2003). In his paper, Cernat(2001) used the log-linear form of the gravity equation to asses nine SS RTAs. He finds evidence that suggests that SS RTAs are less trade diverting than theoretically predicted. Cernats(2001) findings suggest that Mercosur and the Andean Community were overall, trade diverting. Mayda and Steinberg(2006) use a difference-in-difference estimation strategy at commodity level to assess the impact of COMESA on Ugandan imports. They present evidence that South-South trade agreements create positive but little economic gains, through changes in trade patterns, for their members (Mayda and Steinberg, 2003). This is different from Cernats(2001) results, which indicate that imports into COMESA members from third countries were on average 30 per cent higher than those predicted without the trade diversion dummy variable. Mayda and Steinberg (2006) find evidence that no trade diversion takes place in COMESA. The mixed results from these studies, the increasing number of SS RTAs underway and the high number of countries wanting to join completely or in part in these RTAs poses the following questions: Why do policy makers from these countries advocate in favor of these RTAs? Should these RTAs be pursued?, and the still not categorically answered question: Are South-South Regional Trade Agreements trade creating or trade diverting? Using the gravity model, this paper aims to get evidence from SS RTAs from the Americas. Theoretical Framework and Research Methodology ***Intro*** Problem Definition Research Objective Research Questions 3.1 Theoretical Framework 3.1.1 Multiple Regression Analysis and Model Building Figure 4. Regression Hyperplane Multiple regression analysis is a method of inferential statistics that measures the relationship between two or more independent variables and one dependent variable. The multiple regression model is given by: Where: y = dependent variable = regression constant of the population = regression coefficient for each variable xj=1,2,k k = number of independent variables = error of the model Different from a simple regression equation -which forms a straight line in a two-dimensional space to represent the linear relationship between two variables the multiple regression model forms a hyperplane in a multidimensional space (Figure 4). This hyperplane represents the relationship between the dependent variable and k independent variables. To build a multiple regression model, that is, to construct a mathematical equation that represents the relationship between independent and dependent variables, a researcher must decide: The question that needs to be answered The potential independent variables What is a representative sample of the population should be at least four times the number of independent variables (Groebner, et al, 2008) The model used in this paper is well known and widely used by social scientists to measure the flow of various types of variables. This model is explained in section 3.1.3. 3.1.2 Regression Model Diagnosis To ensure the significance of an OLS regression analysis results, the following evaluation criteria are usually used (Groebner, et al, 2008): The coefficient of determination (R2 and R2 adjusted) Significance of the overall model (F-test) Significance of individual variables (t-tests) Size of the standard deviation of the model Multicollinearity of variables The coefficient of determination measures the proportion of variation in the dependent variable that can be explained with the independent variables used by the model. The value of R2 may range from 0-1, with 1 representing a perfect linear relationship between dependent and independent variables. Higher values of R2 are preferred as they would indicate that the chosen independent variables explain better the variations in the dependent variables. A derivate indicator, called adjusted R2, takes into account the number of independent variables in the model, and their contribution the variations in the dependent variable. Because R2 increases when independent variables are added to the model, even if the new variables have no relationship with the dependent variable, adjusted R2 evaluates the model more precisely. The Significance of the overall model can be determined by comparing the Significance F value given in the regression output of a statistical software application, and the critical value for a given alpha level. The critical value for a given alpha level is determined using t-tables and statistical procedures explained in Groebner (2008). The Significance of individual variables is determined by comparing their calculated t-values with the critical t-value of the model. If their calculated t-values are greater than their critical t-values the variable is considered significant. To determine the critical t-values of independent variables, degrees of freedom need to be calculated and interpolated with the desired level of significance in a t-table. For detailed explanations see Groebner (2008). The size of the standard deviation of the model measures the dispersion of observed values of the dependent variable, and the predicted values for the same variable. It is up to the researcher to determine an acceptable range for the standard error estimation. Multicollinearity occurs when two variables provide overlapping information to explain the variation in the dependent variable. To measure multicollinearity the researcher can use the VIF as an indicator. Generally, if the VIF 3.1.3 The Gravity Model of Trade Following Isaac Newtons principle of gravity, according to which two bodies will attract each other more when their sizes are increased and the distance between them is shortened; the gravity model explains trade flow between two countries based on the size of their economies and the distance between their economic centers. The equation representation of the gravity model of trade is: (Formula 1) Where Fg represents trade flow, G is the constant, m1 and m2 are the economic dimensions of the two countries in question, and d is the distance between the two countries. In its basic log-linear form, the gravity equation is as follows: (Formula2) Where is the bilateral trade flow between countries i and j at time t, ÃŽÂ ± is the constant, is the natural logarithm of the GDP of country i, is the natural logarithm of the GDP of country j, is the natural logarithm of the distance between country i and country j, and ÃŽÂ µ is the normally distributed error. This basic gravity model is usually augmented by including other variables like adjacency, common language, colonial links, common currency, and RTA membership among others. Different authors have suggested many different specifications for the gravity model of trade  [1]  , however there is no consensus about which model specification is more accurate and serves best in assessing RTAs. Moreover other authors have suggested that the gravity model is biased due to endogeneity and reverse causality (Magee, 2003) and have led others to use entirely different methods to asses RTAs (Mayda Steinberg (2006). This paper uses a gravity model specification that is similar to Cernat (2001) but considers Cheng Walls (2003) suggestions of eliminating dummy variables that might capture unintended trade distorting variables. To assess trade creation and trade diversion in nine RTAs, Cernat(2001) adds two dummy variables to an already augmented specification of the model: Intra_RTA and Extra_RTA. The Intra_RTA dummy becomes a 1 when both, the importing and the exporting countries, are partners in the RTA being assessed by the two dummies. The Extra_RTA dummy becomes one when the importing country is part of the assessed RTA but the exporter is a third country. The model uses bilateral trade flows as a dependent variable and 18 independent variables: GDP of importing country, GDP of the exporting country, GDP per capita of the importing country, GDP per capita of the exporting country, Population of the importing country, population of the exporting country, distance between the capital cities of both countries, an adjacency dummy variable, a common language dummy variable, nine Intra_RTA dummy variables (one for each RTA assessed), and nine Extra_RTA dummy variables (one for each RTA assessed). All non-dummy variables expressed in their logarithmic form. In theory, the Intra_RTA dummies will capture the effect that the assessed RTA had on trade between partners of the RTA; and the Extra_RTA dummy captures the effect of the same RTA on trade of RTA members with third countries. To diagnose a RTA as trade crating or trade diverting, Cernat (2001) designed an Intra-Extra coefficient table (Table# in this paper). According to this table, if a trade agreement increased trade between its partners at the expense of third countries -diverted trade, the Intra_RTA dummy should be positive and the Extra_RTA dummy negative. If the agreement created trade instead, the coefficients of both dummies would be positive. Coefficient Extra_RTA Intra_RTA Sign + + Trade creation and trade expansion Trade diversion Trade expansion Trade contraction Table 1: Dummy Variable Interpretation Cheng Wall (2003) use a fixed-effect panel data analysis to measure the effect on trade of RTAs over time. Their proposed model allegedly controls the heterogeneity bias in the gravity model of trade. In it, Cheng Wall (2003) drop all dummy variables and even drop the distance variable. They argue that these variables bias the gravity model and they motivate their argument in a number of ways. First, they reason that economic distances are too hard to measure with accuracy because big countries have many economic centers, that are thousands of miles apart and that serve as trade centers for diffe Effect on Trade Flows of Regional Trade Agreements Effect on Trade Flows of Regional Trade Agreements Abstract This paper studies the effect on trade flows of RTAs signed between developing economies. It uses a variation of the gravity model of trade to asses five RTAs: Mercosur, The Andean Community, SICA, the EU, Chile-China. Contents Abstract iii List of Figures vi List of Tables vi List of Formulas vi 1. Introduction viii 1.1Background viii 1.2 Problem definition x 1.3 Research Objective x 1.3.1 Major research question x 1.3.2 Minor research question xi 1.4 Theoretical Framework xi 1.4.1 The Gravity model of trade xi 1.4.2 Research Methodology and Design xii 1.4.3 Research Assumptions xii 1.4.4 Research Limitations xii 1.5 Thesis Structure xiii 2. Literature Review xiii 2.1 Trade Creation and Trade Diversion xiv 2.1.1 Trade Creation xiv 2.1.2 Trade Diversion xvii 2.1.3 Gross Trade Creation xviii 2.2 Empirical Evidence from SS RTAs xx 3.Theoretical Framework and Research Methodology xxi 3.1 Theoretical Framework xxi 3.1.1 Multiple Regression Analysis and Model Building xxi 3.1.2 Regression Model Diagnosis xxii 3.1.3 The Gravity Model of Trade xxiii 3.1.4 Research Assumptions xxvii 3.1.5 Research Limitations xxvii 3.2 Research Methodology xxvii 3.2.1 Research Type and Approach xxvii 3.2.2 Data Collection xxx 4. Findings and Results xxxi 4.1 The effect of RTAs xxxi 5. Conclusions xxxiii 6. Appendix xxxiv 7. References xxxvii List of Figures Figure 1 Trade Creation. Figure 2 Trade Diversion Figure 3 Trade Creation Proper vrs. Gross Trade Creation Figure 4 Multiple regression hyperplane List of Tables Table 1 Dummy Variable Interpretation.. Table 2 RTAs assessed and Members Table 3 Regression results of individual years Table 4 Regression results of PCS List of Formulas Formula 1 Gravity model equation Formula 2 Log linear form of the gravity model Formula 3 Current gravity specifications.. Abbreviations CGE: Computable General Equilibrium COMESA: Common Market for Eastern and Southern Africa FTA: Free Trade Agreement GATT: General Agreement on Tariffs and Trade GDP: Gross Domestic Product MERCOSUR: Mercado ComÃÆ' ºn del Sur RTA signed between Brazil, Argentina, Uruguay and Paraguay NAFTA: North American Free Trade Agreement OLS: Ordinary Least Squares PCS: Pooled Cross-Section PTA: Preferential Trade Agreement RIA: Regional Integration Agreement RTA: Regional Trade Agreement SICA: Sistema de IntegraciÃÆ' ³n Centro Americana RTA between Honduras, Costa Rica, El Salvador, Guatemala, Nicaragua Panama and Belize SS: South-South UNCTAD: United Nations Conference on Trade and Development WB: World Bank WITS: World Integrated Trade Solution WTO: World Trade Organization 1. Introduction Background Four hundred and sixty two RTAs have been notified to the WTO up to February 2010 (WTO,2010). From 1948-1994 the GATT received one hundred and twenty four notifications of RTAs, and since its creation in 1995, the WTO has received over 300 RTA notifications, (WTO,2010). This trend of forming trading blocs is likely to become stronger as more RTAs are currently under negotiation. Of particular interest to economists, and the focus of this paper, are South-South RTAs, that is, RTAs signed between countries of low income levels. There are reasons to believe that SS RTAs may not only fail to stimulate economic growth among member countries, but also hinder growth for these countries. In their book Regional Integration and Development, Winters and Schiffer (2003) state that there is some evidence that North-South RTAs stimulate economic growth in the southern partner, little evidence that North-North RTAs stimulate growth and NO evidence that South-South RTAs do so. Specifically they argue that SS RTAs do not provide partners with access to technology or knowledge that is characteristic of rich countries; SS RTAs are unlikely to add credibility to government policies and may even hinder investment if not accompanied by liberalization of trade with the rest of the world; and, SS RTAs are likely to generate only trade diversion and no trade creation Mayda and Steinberg (2006) argue that SS RTAs are unlikely to provide the positive effects of competition and economies of scale because partner countries are both small and poor. In addition, the loss of fiscal revenues harms the member country economies and finally, SS RTAs are more likely to divert trade rather than create trade. Willmore (1976) and Nicholls (1998) make similar points using the Central American Common Market as an example. Trade creation and trade diversion are concepts that were introduced by Jacob Viner in 1950. Both terms refer to the redirection of trade flows as a consequence of an RTA. In trade creation, goods that were previously produced by a local economy are instead imported from more efficient producers in countries within the RTA. Trade diversion refers to the redirecting of trade from the more efficient producer to a less efficient producer within the RTA. In both cases, trade creation and trade diversion, the trade flows are affected by the reduction of tariffs to member countries typical of RTAs. Trade creation and trade diversion are explained with more detail in section 2.1 of this paper. A number of studies have been conducted to assess the effects of SS RTAs in partner countries -most of them attempt to determine if the RTAs were trade creating or trade diverting e.g. Evans (1998), Lewis et al. (1999), Flores (1997), Cernat (2001,2003)), Subramanian and Tamirisa (2001), Mayda and Steinberg (2006). Different methods have been used and the results are mixed. As a reference, this paper focuses on the results of Cernat (2001, 2003), Flores (1997), and Mayda and Steinberg (2006). Different methods were used in these studies and the results were mixed. Cernat (2001) used the log-linear form of the gravity equation to assess nine SS RTAs. He finds evidence that suggests that SS RTAs are less trade diverting than theoretically predicted. Cernat (2001) findings suggest that Mercosur and the Andean Community were overall, trade diverting. On the other hand Flores (1997), using a CGE analysis, concluded that Mercosur was trade creating. Mayda and Steinberg (2006) use a difference-in-difference estimation strategy at commodity level to assess the impact of COMESA on Ugandan imports. They present evidence that South-South trade agreements create positive but little economic gains, through changes in trade patterns, for their members. This is different from Cernat (2001) results, which indicate that imports into COMESA members from third countries were on average 30 per cent higher than those predicted without the trade diversion dummy variable. Mayda and Steinberg (2006) find evidence that no trade diversion takes place in COMESA. The mixed results from these studies, the increasing number of SS RTAs underway and the high number of countries wanting to join completely or in part in these RTAs poses the following questions: Why do policy makers from these countries advocate in favor of these RTAs? Should these RTAs be pursued?, and the still not categorically answered question: Are South-South Regional Trade Agreements trade creating or trade diverting? Using the gravity model, this paper aims to get evidence from SS RTAs from the Americas. 1.2 Problem definition Do South-South Regional Trade Agreements create trade or divert trade? The literature on this topic is vast and contradictory. Everybody thinks that SS-RTAs are trade diverting. Some papers present evidence of this. Other present evidence that they are actually trade creating. Finally others find evidence of very little trade creation and no significant evidence of trade diversion. With so many RTAS in place and many others underway, it is important to understand the effects of creating these trade blocs. Should poor countries pursue RTAs with poor countries? Are SS RTAs building blocks or stumbling stones towards the world liberalization of trade? 1.3 Research Objective The main objective of this paper is to determine if MERCOSUR, Andean Community, and SICA were trade creating or trade diverting in the years 1995, 1998, 1999, 2003, 2007. 1.3.1 Major research question Is there significant evidence of trade creation or trade diversion on the years 1995,1998,1999,2003,2007 for Mercosur, Andean Community and SICA? 1.3.2 Minor research question Is there significant evidence that suggests that RTA members of the above mentioned RTAs increased trade between them and their partners? Is there significant evidence that suggests that members of the above mentioned RTAs increased trade between them and third countries? Is there significant evidence that suggests that the increase in trade between RTA partners of the above mentioned RTAs is higher than the decrease in trade between RTA members and third countries? 1.4 Theoretical Framework 1.4.1 The Gravity model of trade The gravity model uses Newtonian gravity principles to study human behavior. It is widely used by economists and social scientists to predict flows of trade, people, goods, money, and other variables as an effect of changes in economic policies, fiscal policies, new laws, bans and other distortions to the flow of a given variable. The original gravity model of trade assumes that two countries will trade more or less depending on the sizes of their economies and the distance between their economic centers. It was created independently by Tinbergen (1962) and PÃÆ' ¶yhÃÆ' ¶nen (1963) and augmented in later years to include other independent variables that may cause a change in trade flows. These augmented versions of the basic gravity model may include: population of the two countries, presence of common borders, same language, common colonizer, and others that the researcher regards as relevant. The gravity model specifications used in this paper are similar to those of Cernat(2001) and Cheng Hall (2003). These specifications are used to run OLS regressions on trade data of 1995, 1998, 1998, 2003 and 2007. One set of pooled data including the years mentioned is analyzed using the same gravity specifications. The results of these regressions provide evidence of gross trade creation and diversion as specified by Balassa (1967) 1.4.2 Research Methodology and Design The paper uses standard OLS analysis, with bilateral imports as a dependent variable and 17 independent variables: GDP of the importing country, GDP of the exporting country, Population of the importing country and population of the exporting country, distance between the capital cities of each country pair, Intra_x dummy variable for each RTA, Extra_x dummy variable for each RTA. The values of GDPs, distance and populations are used in their logarithmic form. GDPs and population data was collected from the WB databank. Trade data was collected from UNCTADs database using the WB banks WITS application. 1.4.3 Research Assumptions Costs of transportation are proportional to the great circle distance between economic centers of countries studied All countries have one economic center, namely their capital cities. The error coefficient of the log-linear gravity model used in this paper is normally distributed with a mean of zero and constant variance for all observations. It is also assumed that error pairs are uncorrelated. GDPs, population, and trade data collected belongs to the population 1.4.4 Research Limitations 1.5 Thesis Structure The remainder of this paper is organized as follows: Chapter 2 presents a literature review that explains trade creation and trade diversion, the effect of both and findings of previous papers that assess RTAs. Chapter 3 explains the gravity model used on the paper, how data was collected and organized, and the considerations in analyzing data. Chapter 4 summarizes the findings and Chapter 5 concludes. 2. Literature Review There is extensive literature on RTAs. This literature either predicts the effects of a RTAs using a computable-general equilibrium analysis or they measure the effects of an FTA using aggregate data or commodity level data. The concern of most authors, and the reason why they conduct their research, is that FTAs and specially SS FTAs may divert trade rather than create it. In the former case, purchases from an efficient producing country are replaced by purchases of a less efficient FTA partner. This section serves three purposes: 1. It explains trade creation and trade diversion to the reader so she can better understand the methodology used to assess the selected RTAs. 2. It presents the reader with the results of previous findings so that the reader can compare the results of this paper with previous results of other authors. 3. It gross trade creation and diversion so that the reader can understand the results of the research. 2.1 Trade Creation and Trade Diversion Trade creation and trade diversion as defined by Viner (1950), refer to changes in flow of trade between nations. Trade creation happens when trade is switched from less efficient producers of one country to more efficient producers in another country a better allocation of resources. In trade diversion trade is shifted from more efficient producers in one country to less efficient producers in another country -a worsening in the allocation of resources. 2.1.1 Trade Creation Trade creation can be defined as the net welfare gain that results from the initiation of an RTA, both on the production and on the consumption side. Some economists though, think that it is more precise to think of trade creation only as the increase in welfare from the production side (Senior-Nello S, 2010). In this paper the former definition of welfare is considered. To understand trade creation, imagine the following scenario (Figure 1): The country in question, Country X, say Honduras, imports product Q from country M (United States) at price Pw+t, which includes an ad valorem tax and is the same price offered by other nations in the world, including country E (El Salvador). At this price, Honduras imports 20 units and consumes 60. The remaining 40 units are imported from the US. This is illustrated by the Honduran supply and demand lines in Figure 1 and the perfectly elastic supply curve with free trade of El Salvador. It is understood that a change in Honduran imports of product Q cannot affect the world price of product Q. Figure 1. Trade Creation If Honduras signed an RTA with El Salvador and the price of product Q from El Salvador dropped to PE, Honduras would now produce 10 units of product Q, consume 70, and import the difference of 60 units. Because El Salvador now offers a lower price for product Q, Honduras now imports this product from El Salvador and not from the US. The consumer surplus gains of this RTA are represented by areas a+b+c+d. The loss in producer surplus is indicated by area a. The loss of tariff revenue for Honduras is area c. Therefore the net welfare increase of this RTA between El Salvador and Honduras is indicated by triangles b and d. Triangle b represents the amount of production that was shifted from less efficient producers in Honduras to more efficient producers in El Salvador a better allocation of resources. Triangle d represents the increase in consumption of product Q. 2.1.2 Trade Diversion Trade Diversion is illustrated in figure 2. Again the supply and demand lines are those of Honduras for product Q. Line S1 and S2 are the perfectly elastic supply curves of USA and El Salvador respectively, and lines S1+t and S2+t are the tax inclusive supply curves of the same two countries. Figure 2. Trade Diversion Honduras imports product Q from the US at tax inclusive price Pw+t. El Salvador offers product Q at price PE+t and thus does not benefit from Honduran purchases. At price Pw+t Honduras produces 20 units, consumes 60, and imports 40 from the US. If Honduras and El Salvador now form an RTA and do not include the US, tariffs will be removed on imports from El Salvador but not from imports from the US. After forming the RTA Honduras would produce 10 million units, consume 80 million and import 60 million units of product Q from El Salvador at price PE. The RTA has diverted trade from more efficient producers in the US to less efficient producers in El Salvador, so there is a worsening in the allocation of resources. On the other hand 10 million units are now imported from El Salvador instead of being produced at home in Honduras. At the same time 40 million units that were previously imported from the US are now being imported from El Salvador. The welfare loss from trade diversion is reflected rectangle f. The 40 million units that were imported from more efficient producers in the US whose free trade price is $1.00 are now imported from El Salvador at $2.00. The welfare loss is $40 million. The welfare gain from the customs union is calculated as the areas of triangles b and d. Triangle b is the welfare gain in the production side: $5 million. Triangle d is the welfare gain in the consumption side: $10 million. The total impact on welfare as a result of the RTA is given by the sum of the areas of triangles b and d minus the area of rectangle f (b+d-f): welfare gain minus welfare loss. In this case the RTA generated a welfare loss of $25 million. Figure 2 illustrates that the idea of trade creation and trade diversion can be misleading. If, for example, the sum of areas of triangles b and d would be greater than the area of rectangle f, the RTA would cause a net welfare gain. In this scenario, although trade has been diverted from more efficient producers in one country to less efficient producers in another, the RTA increased welfare for the RTA signing country. 2.1.3 Gross Trade Creation Following the lead of Jacob Viner, Balassa (1967) evaluated the effects of the European Common Market with reference to its trade creating and trade diverting effect using Tinbergen (1962) and PÃÆ' ¶yhÃÆ' ¶nen (1963) model -the gravity model. In his work he developed model that captured substitution of less efficient domestic and foreign suppliers for more efficient foreign suppliers gross trade creation; which is different than Viners definition of trade creation according to which trade is created only at the expense of local producers. To illustrate the difference gross trade creation and trade creation proper as defined by Viner (1950), consider three trading partners of one particular product countries A, B, and C, product Q (See Figure 3). Before signing a RTA with country B, Country A imports product Q from both, Country B and Country C in equal amounts and has 4 local producers of the same product (Figure 3a). In the case of trade creation proper (Figure 3b), after signing a RTA with country B, Country A continues to import equal amounts of product Q from countries B and C but has reduced the number of local producers of the same product. More efficient producers in Country B have absorbed market share from local producers in Country A trade creation proper. Gross trade creation on the other hand (Figure 3c), considers that trade is created not only when local producers are substituted, but also when producers in third countries are substituted. In this case, after signing a RTA with country B, Country A decreases its imports of product Q from Country C and increases imports of the same product from Country B while keeping the same number of local producers. It is important to note that gross trade creation assumes that substituted producers in Country C were less efficient than producers in country B; the contrary would constitute trade diversion. Figure 3. Trade Creation Proper vrs Gross Trade Creation Like in Cernat (2001), this paper evaluates the gross trade creating effects of the assessed RTAs. In his paper, Balassa (1967) provides evidence of trade creation in the European Common Market during six years since the Markets establishment. Again, trade creation applies to the substitution of any less efficient producer for a more efficient one, independent of the producers base country. The why of the expected differences between the results of developed country RTAs and SS RTAs is explained in the next section. 2.2 Empirical Evidence from SS RTAs A number of studies have been conducted to assess the effects of SS RTAs in partner countries -most of them attempt to determine if the RTAs were trade creating or trade diverting e.g. Evans (1998), Lewis et al. (1999), Flores (1997), Cernat (2001), Subramanian and Tamirisa (2001), Cernat (2003), Mayda and Steinberg (2006). Different methods have been used and the results are mixed. This paper uses methods similar to Cernat (2001) and Cheng Wall (2003). In his paper, Cernat(2001) used the log-linear form of the gravity equation to asses nine SS RTAs. He finds evidence that suggests that SS RTAs are less trade diverting than theoretically predicted. Cernats(2001) findings suggest that Mercosur and the Andean Community were overall, trade diverting. Mayda and Steinberg(2006) use a difference-in-difference estimation strategy at commodity level to assess the impact of COMESA on Ugandan imports. They present evidence that South-South trade agreements create positive but little economic gains, through changes in trade patterns, for their members (Mayda and Steinberg, 2003). This is different from Cernats(2001) results, which indicate that imports into COMESA members from third countries were on average 30 per cent higher than those predicted without the trade diversion dummy variable. Mayda and Steinberg (2006) find evidence that no trade diversion takes place in COMESA. The mixed results from these studies, the increasing number of SS RTAs underway and the high number of countries wanting to join completely or in part in these RTAs poses the following questions: Why do policy makers from these countries advocate in favor of these RTAs? Should these RTAs be pursued?, and the still not categorically answered question: Are South-South Regional Trade Agreements trade creating or trade diverting? Using the gravity model, this paper aims to get evidence from SS RTAs from the Americas. Theoretical Framework and Research Methodology ***Intro*** Problem Definition Research Objective Research Questions 3.1 Theoretical Framework 3.1.1 Multiple Regression Analysis and Model Building Figure 4. Regression Hyperplane Multiple regression analysis is a method of inferential statistics that measures the relationship between two or more independent variables and one dependent variable. The multiple regression model is given by: Where: y = dependent variable = regression constant of the population = regression coefficient for each variable xj=1,2,k k = number of independent variables = error of the model Different from a simple regression equation -which forms a straight line in a two-dimensional space to represent the linear relationship between two variables the multiple regression model forms a hyperplane in a multidimensional space (Figure 4). This hyperplane represents the relationship between the dependent variable and k independent variables. To build a multiple regression model, that is, to construct a mathematical equation that represents the relationship between independent and dependent variables, a researcher must decide: The question that needs to be answered The potential independent variables What is a representative sample of the population should be at least four times the number of independent variables (Groebner, et al, 2008) The model used in this paper is well known and widely used by social scientists to measure the flow of various types of variables. This model is explained in section 3.1.3. 3.1.2 Regression Model Diagnosis To ensure the significance of an OLS regression analysis results, the following evaluation criteria are usually used (Groebner, et al, 2008): The coefficient of determination (R2 and R2 adjusted) Significance of the overall model (F-test) Significance of individual variables (t-tests) Size of the standard deviation of the model Multicollinearity of variables The coefficient of determination measures the proportion of variation in the dependent variable that can be explained with the independent variables used by the model. The value of R2 may range from 0-1, with 1 representing a perfect linear relationship between dependent and independent variables. Higher values of R2 are preferred as they would indicate that the chosen independent variables explain better the variations in the dependent variables. A derivate indicator, called adjusted R2, takes into account the number of independent variables in the model, and their contribution the variations in the dependent variable. Because R2 increases when independent variables are added to the model, even if the new variables have no relationship with the dependent variable, adjusted R2 evaluates the model more precisely. The Significance of the overall model can be determined by comparing the Significance F value given in the regression output of a statistical software application, and the critical value for a given alpha level. The critical value for a given alpha level is determined using t-tables and statistical procedures explained in Groebner (2008). The Significance of individual variables is determined by comparing their calculated t-values with the critical t-value of the model. If their calculated t-values are greater than their critical t-values the variable is considered significant. To determine the critical t-values of independent variables, degrees of freedom need to be calculated and interpolated with the desired level of significance in a t-table. For detailed explanations see Groebner (2008). The size of the standard deviation of the model measures the dispersion of observed values of the dependent variable, and the predicted values for the same variable. It is up to the researcher to determine an acceptable range for the standard error estimation. Multicollinearity occurs when two variables provide overlapping information to explain the variation in the dependent variable. To measure multicollinearity the researcher can use the VIF as an indicator. Generally, if the VIF 3.1.3 The Gravity Model of Trade Following Isaac Newtons principle of gravity, according to which two bodies will attract each other more when their sizes are increased and the distance between them is shortened; the gravity model explains trade flow between two countries based on the size of their economies and the distance between their economic centers. The equation representation of the gravity model of trade is: (Formula 1) Where Fg represents trade flow, G is the constant, m1 and m2 are the economic dimensions of the two countries in question, and d is the distance between the two countries. In its basic log-linear form, the gravity equation is as follows: (Formula2) Where is the bilateral trade flow between countries i and j at time t, ÃŽÂ ± is the constant, is the natural logarithm of the GDP of country i, is the natural logarithm of the GDP of country j, is the natural logarithm of the distance between country i and country j, and ÃŽÂ µ is the normally distributed error. This basic gravity model is usually augmented by including other variables like adjacency, common language, colonial links, common currency, and RTA membership among others. Different authors have suggested many different specifications for the gravity model of trade  [1]  , however there is no consensus about which model specification is more accurate and serves best in assessing RTAs. Moreover other authors have suggested that the gravity model is biased due to endogeneity and reverse causality (Magee, 2003) and have led others to use entirely different methods to asses RTAs (Mayda Steinberg (2006). This paper uses a gravity model specification that is similar to Cernat (2001) but considers Cheng Walls (2003) suggestions of eliminating dummy variables that might capture unintended trade distorting variables. To assess trade creation and trade diversion in nine RTAs, Cernat(2001) adds two dummy variables to an already augmented specification of the model: Intra_RTA and Extra_RTA. The Intra_RTA dummy becomes a 1 when both, the importing and the exporting countries, are partners in the RTA being assessed by the two dummies. The Extra_RTA dummy becomes one when the importing country is part of the assessed RTA but the exporter is a third country. The model uses bilateral trade flows as a dependent variable and 18 independent variables: GDP of importing country, GDP of the exporting country, GDP per capita of the importing country, GDP per capita of the exporting country, Population of the importing country, population of the exporting country, distance between the capital cities of both countries, an adjacency dummy variable, a common language dummy variable, nine Intra_RTA dummy variables (one for each RTA assessed), and nine Extra_RTA dummy variables (one for each RTA assessed). All non-dummy variables expressed in their logarithmic form. In theory, the Intra_RTA dummies will capture the effect that the assessed RTA had on trade between partners of the RTA; and the Extra_RTA dummy captures the effect of the same RTA on trade of RTA members with third countries. To diagnose a RTA as trade crating or trade diverting, Cernat (2001) designed an Intra-Extra coefficient table (Table# in this paper). According to this table, if a trade agreement increased trade between its partners at the expense of third countries -diverted trade, the Intra_RTA dummy should be positive and the Extra_RTA dummy negative. If the agreement created trade instead, the coefficients of both dummies would be positive. Coefficient Extra_RTA Intra_RTA Sign + + Trade creation and trade expansion Trade diversion Trade expansion Trade contraction Table 1: Dummy Variable Interpretation Cheng Wall (2003) use a fixed-effect panel data analysis to measure the effect on trade of RTAs over time. Their proposed model allegedly controls the heterogeneity bias in the gravity model of trade. In it, Cheng Wall (2003) drop all dummy variables and even drop the distance variable. They argue that these variables bias the gravity model and they motivate their argument in a number of ways. First, they reason that economic distances are too hard to measure with accuracy because big countries have many economic centers, that are thousands of miles apart and that serve as trade centers for diffe