Organic Food - Facts Essay Example for Free

Organic Food Facts Essay The word Organic means living, and in practical terms, this means natural food that is grown and processed without chemical fertilizers, pesticides, herbicides or fungicides. Nothing unnatural is allowed so there are no growth hormones, antibiotics, preservatives, dyes, chemical coatings or irradiation allowed. There is no genetic engineering allowed in organic foods. Organic food is nothing else but good pure nutritional food the way it used to be. Toxic overload The food we eat affects our health. Most conventionally produced food comes from production systems that rely on a cocktail of up to 350 different chemicals. The World Health Organization has classified many of these substances as hazardous to our health. In studies, the short and long term effects on our health from these toxic chemicals ranges from short term conditions such as ADS (Attention Deficit Syndrome), allergies, digestion and reproductive disorders to long term illnesses such as cancers and degenerative diseases like Alzheimer. Our organic food however is different because by definition it is pure, wholesome and nutritious. There are absolutely no toxins or otherwise artificial or synthetic chemicals, coatings or treatments that in any way affect quality of organic food. In harmony with Nature Organic and bio-dynamic farmers work with nature, promoting the diversity and sustainability of the environment and building upon a healthy eco-system. Organic agriculture preserves the overall quality of our lakes, rivers, estuaries, wetlands, ground and drinking water. Organic farming relies on renewable resources, using 70% less and producing much less pollution than conventional farming. Preserving the soil is a key factor. They practice methods such as intercropping where crops are mixed, rather than grown in large fields, minimizing the impact of agriculture on the environment. Humane treatment to animals Our organic livestock is raised in an ethical and humane manner, which puts emphasis on the health and treatment of the animals. Fresh air and space to move around and access to the outdoors ensure a healthy and stress-free animal. They are fed only organically grown feed and are reared without the unnecessary use of anti-biotics, growth promoters or hormones. Organic animals are never fed unnatural food such as animal scraps which is the practice that lead to the livestock neural disease BSE and its related kreuzfeld Jacobs disease in humans. Bio-diversity Organic farmers plant many more species of fruit and have brought back many heirloom varieties from the brink of extinction. These old varieties are often tastier and juicier but not suited to large scale industrial farming. In Britain,organic farmers grow 100 different varieties of potatoes alone! This bio-diversity gives us the joy and experience of eating new and different fruits and vegetables. GM-free Genetic engineering is not permitted in organic food and an organic farmer loses his organic certification if his crop is not 100io gm-free. Genetically engineered agricultural products have an unknown impact on the safety and health of the consumer and environment. Organic Foods and Cafe does not sell genetically modified food. For further information please read our GM leaflet. The benefits of going Organic Trusting our food. Organic labeling tells you all the ingredients there are no hidden ingredients that there can legally be in conventional foods as in conventional foods, the ingredients of each individual ingredient do not have to be listed. You know you can trust organic food because of the organic certification which has strictly enforced criteria look for the organic symbol. Optimum Health In terms of health, prevention is better than cure. It is essential not to overload our bodies with toxins, which damage our immune systems. Organic farmers avoid using unnecessary and harmful chemicals, additives and drugs. Many of these substances have been classified by the W. H. O. as poisonous to your health and the environment. In addition, organic food retains essential nutrients, such as iron and salicylic acid, which are stripped away in conventional food processing. Value for money You get what you pay for this is very valid for organic food. Organic food really has more nutrients, vitamins and minerals, including vitamin C, iron, magnesium and phosphorous than conventionally produced food. This is because in organic farming, great emphasis is on nourishing the soil which in turn gives healthy plants. Healthy plants give produce that is packed full of all the vitamins and minerals which give flavour and goodness to our food. The time allowed for the crops to grow by not using chemical fertilizers is the final key elements making it possible for organic crops to have much higher nutrition levels. Authentic Taste Organic produce and meats retain a pure, fresh flavour the way nature intended. In studies, organic produce was proven to have more intense flavour molecules, a direct result of a healthy, dynamic soil. In organic food, flavour is not contaminated or masked by residues, preservatives or waxes. Nor is it enhanced to many times the flavour that is actually present which is common practice to achieve a full flavour where very little is actually there in conventional food. Protecting our future generations We all want the best for our children, and we have selected organic food that provides them with the goodness and nutrition that their growing bodies need to develop optimal mental, emotional and physical performance. It is imperative that they are protected from the detrimental effects of health-damaging toxins found in conventional foods. Today’s children have unacceptably high levels of asthma, eczemas and syndromes such as Attention Deficit Syndrome. Many of these can be linked to unhealthy additives in children’s foods and by eating organic foods we can prevent and alleviate these problems. Supporting Small Farms Organic farms are usually small, family run operations that take seriously the health of the environment and their stewardship of the land they work. They use techniques which limit agricultures impact on the soil, on streams and ground water, bird and wild life and on human health. We have picked selected family run organic certified farms where quality and freshness can be assured. Why does Organic food cost more? The truth is that we have become too used to paying very little for our food and what we put in our mouths has become nothing more than a business commodity. In order to produce high quality organic food, every step of production is more labour-intensive, time-consuming and frankly, not as profitable. Organic food takes longer to grow, as there are no growth hormones and chemical fertilizers used. Due to a lack of fumigants and wax coatings, organic food is often more perishable, there more is lost in transit between the farmer and the consumer. Most farms are small family run operations that do not benefit from government subsidies. The truth is that we are getting what we are paying for: a good quality product that is nutritious, delicious and safe for us to eat and not the cheapest product that is possible to produce. Organic Produce 1. Organic produce has an average of 50% more vitamins, minerals, enzymes and other micro-nutrients than their intensively farmed counterparts. 2. Organic produce is not covered in a cocktail of poisonous chemicals. The average conventionally grown apple has 20 30 artificial chemicals on its skin even after washing. 3. Organic produce is usually picked when it is ripe, unlike conventional food, which to allow for extra processing and commercial ease, is picked unripe and before it is fully developed. What is the Difference? Conventional Vs Natural / Organic Food (As per USDA rules) No| Ingredient / Processing| Conventional Food| Natural / Organic Food| 1| Artificial Flavours| May be used| No|. 2| Artificial Colours| May be used| No| 3| Artificial Preservatives| May be used| No| 4| Artificial Fertilizers| May be used| May be used| 5| Synthetic Pesticides| May be used| May be used| 6| Irradiation| May be used| May be used| 7| Genetically Engineered | May be used| May be used| What are genetically Engineered/ Modified Food? Genetically-modified food is produced from plants and animals which have had their genes changed in the laboratory by scientists. All living organisms have genes written in their DNA. They are the chemical instructions for life and all the organisms functions. By modifying the genes, the scientists can change the characteristics of an organism. Most often, these modifications to our food are for economic reasons. To create GM crops, genes from bacteria, viruses, plants, animals and even humans have been inserted into plants such as soybeans, corn, canola and cotton. For example scientists wanted to increase the frost tolerance of strawberries so they inserted the anti-freeze gene of a cold water fish into the DNA of the strawberry, in effect producing fishberries, a life form that would never occur in nature. Why is it Different from Traditional Crossbreeding? For thousands of years farmers have engaged in what termed as traditional breeding, favoring seeds from plants with favorable characteristics and creating new plant types from cross-breeding closely-related species. Genetic engineering is more specific. It gives scientists the ability to select a single gene for a single characteristic and transfer that stretch of DNA from one organism to another. For example, a tomato variety was developed by Calgene to switch off the gene which triggers it to produce a chemical that makes the fruit go soft and then rot. What are the Dangers? Genetic engineering is experimenting with very delicate, yet powerful forces of nature without full knowledge of the repercussions. Yet, once it is introduced into the food system there is no way of getting it out of it as insects, birds, and wind can carry genetically altered seeds into neighboring fields and beyond. All crops are vulnerable to contamination from cross-pollination from transgenic plants. Health Concerns Manufacturers of genetically altered foods are exposing humanity to one of the largest uncontrolled experiments in history. We are all guinea pigs in this genetic experiment with our food. Some possible risks: No long term safety testing Genetic engineering uses material from organisms that have never been part of the human food supply to change the nature of the food we eat. Without long term testing and controlled scientific research no one knows if these foods are safe. We really do not know the long term and latent affect these. foods will have on our health. Allergic Reactions By inserting foreign DNA into common foods, without adequate safety testing, genetic engineering can also produce unforeseen and unknown allergens in food. Given that genes can be introduced from unrelated species the possibilities of allergies are greater than with traditionally bred crops. Toxins Familiar foods could become metabolically dangerous or even toxic. Genetic engineering could upset complex biochemical networks and create new bioactive compounds or change the concentrations of those normally present. These unexpected mutations can create new or higher levels of toxins making them poisonous to human health. Antibiotic Resistance Another potential hazard to human health is the possibility that bacteria in our guts could pick up antibiotic resistant genes found in GM foods. These genes are inserted into GM plants as markers to tell scientists which plants have taken up the exotic genes. If this transfer happens it could exacerbate the already worrisome spread of superbug bacteria that have proven to withstand our antibiotics. Decreased Nutritional Value Genetically altered foods may mislead consumers with counterfeit freshness. A luscious looking, bright red GM tomato could be several weeks old and of little nutritional value even though it looks as though it was picked off the vine hours before. Environmental Risks We are opening a Pandoras box with GM technology. Raising GM crops is an uncontrolled experiment with unknown consequences for surrounding eco-systems. Biological Pollution Unlike chemicals that are released into the environment, genetically engineered organisms are living things that will reproduce and spread uncontrollably and at will, with little possibility of containment or clean up. These are not natural organisms, but have been made in a lab and will destroy or at best upset the fragile ecological balance Super Weeds GM crops can cross-pollinate with related weeds, resulting in super weeds that are impossible to control. These weeds are immune to a broad spectrum weed killer after crossing with and assuming the herbicide- resistant gene from the GM plant. This will not only increase the use of topical herbicides but will stimulate demand for stronger, more toxic herbicides. Super Bugs Insects could become resistant to the pesticides engineered into GM crops. This would mean developing new, stronger, more toxic chemical pesticides to fight these pesticide tolerant super bugs. Toxicity to Wildlife Insects and birds will be the first in the animal food chain to be affected by GM crops. They will be exposed to a range of genetically engineered chemicals, drugs, enzymes and hundreds of other foreign substances for the first time, and there is no telling how they will be affected in the short or long term. These substances will then be passed up through the food chain to affect all the wild life in a given eco-system. Humans in turn will get affected, but as so often, by the time we realize what has happened, it may be too late. DDT was hailed as the solution to all pests and it was not till years later that we realized that it was cancer causing and destroying a lot more than just the bugs we were targeting. Loss of Biodiversity In the world of genetic engineering we would not need hundreds of different varieties of a crop because all the properties and features can be in a single plant. For example you would not need one species of corn for hot climates and another for cold or one that is drought resistant and another to withstand flooding. All of these unique features can be in a single plant. In the end many species would become extinct. It may only be years after they are extinct that we realize that we have destroyed some features we may still need. Ethical Questions Fiddling with the genetic make-up of plants and animals is unnatural. Nature takes millions of years to effect genetic change, so do we have the right to make changes overnight and substitute human for natural selection? Do we have the right to play God, to restructure irreversibly the genetic blueprints of the Earths plants and animals? Are we playing Creator? Fixing Perfection Are we trying to fix something which isnt broken? Are we trying to change the course of nature for a good enough purpose? Manipulating the very building blocks of life in order to extend shelf life, is that a good reason? Religious Concerns Genetic engineering offends deeply held beliefs of a number of different faiths. A Hindu vegetarian may not wish to eat a vegetable bearing an animal gene and likewise, a Muslim may not think it right to eat a tomatoe carrying the gene of a pig. Genetic manipulation hits at the very core of our belief systems and deprives us of the comfort and the assurance that the food we eat complies with our dietary obligations. Are these beliefs going to be secondary to the potential profits of large ago-business?

The Characteristics Of Childrens Learning Styles

The Characteristics Of Childrens Learning Styles CHAPTER I The background and main characteristics of childrens learning style 1.1 The characteristic of teaching young learners The concept of learning is influenced by the psychological study of the learning process and is widely interpreted in the popular use. The psychological concept extends quite far and includes all parts of childrens development, from language acquisition to social roles and changes in their personality. Language teaching can be widely interpreted as all activities intended to facilitate and cause language learning. At the beginning of learning the new language, the learners knowledge has none or hardly any associations with the language, it is as an infant learning its first language. The lack of contact with the language and the lack of a safe reference system can give the learner an intellectual and emotional shock which can discourage from further learning. Thus, the task for the teacher is to overcome childrens disorientation which characterises the beginnings of learning, build up and associate a system of positive attitudes and feelings with the language: that is, being able to reply spontaneously and to think in the second language. In teaching of the second language, certain social strategy is also needed, so that children should feel a need of imitation and acquire the second language in the same way as their first one. (H.H. Stern Fundamental Concepts of Language Teaching:397-400) Childrens world is based on games and having fun and the same should apply to their learning. Children should not be aware of learning, neither lexicon nor grammar, but the teacher can easily use these facts to teach the foreign language through games, stories and songs. In teachers work with young learners, it is important to teach them according to psychological and pedagogical rules. The amount of material which the learners can remember depends on teaching techniques and the way the material is drilled. It is important to remember that lack of stress in learning makes it more efficient and easier to use in real situations. What is more, only friendly attitude of the teacher towards a learner, teachers willingness for learning and using all methods of relaxation can protect a child from being discourages and shy in learning and using the foreign language. Any good associations with parts of the material can cause that vocabulary or grammar will be better and longer remembered. It is also important that childrens concentration span is quite short and it is crucial to use any procedures which can make the learner able to longer concentration. Student should be also involved and interested in the lesson (BrzeziÅ„ski 1987: 145-150). Childrens learning is based on imitation and having fun rather than on their awareness of learning. Imitation is the easiest way of introducing new vocabulary and its aim is to lead to correct articulation and intonation of sounds and their memorization. In teaching young learners, intonation exercises are especially useful because of childrens flexibility of larynx which disappears with time. In terms of imitation exercises, the teacher should pay attention to learners reactions determined by their age. Furthermore , the teacher should change the techniques of teaching to avoid learners getting bored (WoÃ… ºnicki, T./ Zawadzka, E. 1979: 60). Most activities for children should consist of movement and involve their senses. The teacher needs many objects, visuals and pictures to work with, and to create a possibility to use all of the schools surroundings. It is also important for the teacher to let the pupils play with the language, talk to themselves as much as it is possible, use songs, rhymes and tell stories. As a matter of fact, the teacher should let pupils talk even nonsense to enable them to experiment with the language. The basic principle in teaching a language is a variety of activities, pace, organisation, voice and face expressions. Nevertheless, routines in the classroom are also essential so that the children can know the rules, be able to use the mark system and complete tasks. Using familiar situations or activities creates the atmosphere of safety, especially for the shy learners. Another important criteria in making teaching a language efficient is the classroom atmosphere. During the lesson, there is s upposed to be room for shared experiences, group work, pair work; what is more, rewards and prizes should be avoided. It is much more useful for the teacher to make notes about each pupil regularly in case the teacher would like to inform the pupils parents about their progress (W. A. Scott Teaching English to Children:5-7). 1.2 Theory of language acquisition in the early age From around 1975, â€Å"language acquisition† is contrasted with language learning. The American applied linguist Krashen uses the word â€Å"acquisition† to describe learning of the second language which is analogous to the way in which a child learns â€Å"naturally† his or her first language and does not focus on the linguistic form. The disadvantage of Krashens terminology is that it is contrasted with psychological terms. Krashen differentiates between â€Å"acquisition† and â€Å"learning†, as learning for him is more or less conscious. It is a very valuable distinction but it implies a constraint on the use of the term â€Å"learning†, and frequently deliberately limits it to the school-like learning (H.H. Stern Fundamental Concepts of Language Teaching: 18-20). In the light of an early start of language learning, Anderson claims that the way a person acquires mother tongue still remains a riddle. Between birth and the fifth year of life, children develop their ability to speak. Children in the first stage observe adults behaviour and any noises they produce. After some time, they start understand the meaning of such noises without seeing adults movements. The next step is imitation of sounds and (partially) a creation of their own ones. Consequently, children find out that they can control adults behaviour by making certain sounds. Lonnerberg mentions that only 10% of childrens utterings is like adults ones and that 90% of such utterings is their own language production. As far as it is concerned, childrens language acquisition is a dispute between an innate, individual parole and the langue created and used by the society (BrzeziÅ„ski 1987: 22-23). 1.2.1 A critical age for foreign language learning Regarding the age of the earliest acquisition and learning point as birth, the best moment to start teaching a child the second foreign language is the age of 4-5. This is because of childrens flexible larynx which allows for nearly ideal imitation of sounds and the most efficient brain which all together create a great opportunity for language acquisition. Nevertheless, only until the age of 12-13, children keep their flexibility and natural readiness for language acquisition. Lenneberg shows through extended case studies the stages of physiological maturity processes taking place in the brains hemispheres (especially the left one), which is dominant. What is more, if it happens that the left hemisphere is damaged before the age of 12-13, it is possible that the right hemisphere takes over the domination and speech problems can be reduced. In addition, after this age such a process is almost impossible (BrzeziÅ„ski 1987: 28-29). 1.2.2 Childrens second language acquisition The phenomenon of mother tongue acquisition is interesting for linguists, psychologists, neuropsychologists and even neurophysiologists. Furthermore, it is connected with natural bilingualism which occurs when a child learns, in a natural way, the second language. The process of the second language acquisition in natural conditions is quite similar to the first language acquisition or even identical. The only difference between those two is the fact that the second language is assimilated later and is based on experience and knowledge of the first one and, as a result, the whole process happens faster and more effectively (BrzeziÅ„ski 1987: 18). Chomsky(1964) claimed â€Å" it is a common observation that a young child of immigrant parents may learn a second language in the street, with amazing rapidity, and that this speech may be completely fluent and correct to the last allophone, while the subtleties that become second nature to the child may elude his parents despite motivation and continued practice† (BrzeziÅ„ski 1987: 8). The first international meeting connected with childrens acquisition and its use in teaching foreign languages took place in Hamburg in 1961. Participant tried to find out if it is right to introduce foreign languages in the primary schools, if it is true that children learn better than teenagers and adults and which techniques are supposed to be used in teaching them. After four years, the second meeting took place and the first answers were given. During many decades, lots of contrary opinions developed. As early as 1967, Corder points out: â€Å"It still remains to be shown that the process of learning second language is of fundamentally different nature from the process of primary acquisition†. On the other hand, in 1972, Moulton stresses that in teaching a foreign language to young children it is possible to adopt some methods and intuition procedures, used by a child during mother tongue acquisition, and weave them into learning of the foreign language (BrzeziÅ„ski 19 87: 8). 1.2.3 Factors of efficient language learning In 1960s, the matter of teaching a foreign language during the early age was a topic of many discussions. After the war, in many methodological books it was said that children can easily absorb, imitate and produce the new language. Learning of languages in the early age is connected with the habit of repeating words and sentences in a foreign language and acquisition of language material with the help of various memory techniques. The technique of frequent repetition of the material, as the main key to learning a language, is also supported by many psychologists such as Watson and Thorndike. In many psychological books, it is easy to find many completely different definitions of habit. According to â€Å"MaÅ‚y sÅ‚ownik psychologiczny†, habit is well-practised through numerous repetitions: actions which are done always in the same way and automatically. This definition can bring one to a wrong opinion that one should always react in the same way. Lado definites habit as fluency in using units and models of a particular language in answering while attention is not paid to units but to content. There are many more definitions of habit written by A. Szulc, Lompscher or Rubinsztejn, but all these definitions come down to the conclusion that the habit is way of mechanic, unconscious repetition and conscious production leading to the conscious process where consciousness is removed so long as the automatic element is eliminated. In this case, the fact that the process of repetition is the most important comes from the opinion of psychologists based on the theory that acquiring the mother tongue comes from the imitation of adults. There are also certain reasons directly influencing and shaping the process of learning and its efficiency:  · age - ­ after the age of 10, language acquisition ease diminishes. Childrens minds lose their flexibility and it is not that easy to acquire a language. Younger learners have better and more specific memory but have less ability to learn and need more repetitions. Children are more willing to imitate but have a very short concentration span. Their mechanical memory is better than that of the adults, and their short memory is more dynamic and more effective. The older the child, the more specific the way of learning is. Older children have their own range of memory, their long-term memory is more developed and more logic. They can focus more easily and have wider general knowledge. Being more mature, having better learning techniques and better motivation, the young and adults can easily make up this matters, which children can reach thanks to their imitating skills and more flexible minds.  · attitude in learning, there are many elements which have influence on better acquisition or learning, but attitude is one of the most important because it stimulates brain to better work and makes memory work more efficiently. What is more, the lack of motivation can cause that person who is not interested in the topic or in learning itself will not remember anything.  · previous experience connected with the material that has to be learned the more experience the learner has, the easier and more efficient learning is for him or her.  · material and content there are some units of material which are more difficult to understand or remember, for example, sentences which have lots of information. Also, the size of the material, the length of sentences, the kind of material (Passive Voice sentences are harder to remember and require longer time to learn than Active Voice sentences) significantly influence the effectiveness of the learning process.  · way of learning Humans use mechanical or logical memory while the logical one is more preferred and a part of material learned in a logical way is not only easier to reconstruct, but also stays longer in human memory. Certain researches show that talking in a foreign language is not only a simple reproduction of material that was learned. A learner should pay attention to very basic patterns which can be modified and updated with new vocabulary and structures. Mechanical memorising of sentences can be even a quite dangerous and tricky factor because certain language elements occur in a particular arrangement, in a way they were learned and drilled by exercises.  · number of exercises and repetitions Psychological research shows that the long term memory is extended in proportion to the learning time. What is more, overlearning is a very important element in the memorizing process. The higher the level of overlearning, the slower is the process of forgetting. Yet, the level of overlearning is reached individually after each learner performs a number of repetitions. At the same time, mindless repetitions cannot be treated as overlearning.  · time spent on learning It is important how long and how often repetitions and exercises are done. Frequent and short exercises are more efficient than rare and long ones (WoÃ… ºnicki, T./ Zawadzka, E. 1979: 30-40). 1.3 The characteristic of childrens memory Learning styles are various ways of learning. They involve education methods, characteristic for an individual, which are used by the individual to learn best. The alleged basis and efficacy for these proposals have been extensively criticized. Learning styles depend on individual preferences, and, according to Nail Fleming, such styles may be divided into four categories. The fist group is made of visual learners, who, as the term suggestsplies, receive most information visually. These learners have a tendency to do well at public schools because most of what they are taught is presented through visual teaching tools. They do well with visual aids like pictures. For visual learners, the easiest way to learn is watching and calling up visuals in their minds to remember what they studied in the past. They have a tendency toward appreciating arts: crafts, painting or drama. They tend to be creative and imaginative. The second group are auditory learnerswho tend to learn better through listening. They listen to instructions and follow them in such a way that they can gather large amounts of information and deal with it. Auditory learners are very good at listening to lectures and conversations for a longer time without getting bored. They are more concentrated than visual learners and may be more discerning and attentive in the class. They prefer to study with music in the background. These students may also be creative and imaginative. They are good at listening to information and reproducing it in their individual ways. Students with another style known as kinesthetic learning might be mistaken for too active in the classroom. They do not like waiting for information. They prefer to find things out for themselves without any prompts. They are the explorers who want to make new discoveries. They are quick to learn new things and do not mind being left on their own with a particular toy to find out how it works. They can be successful in practical tasks, such as carpentry and design. These children prefer doing rather than thinking. Homeschooling might be a better for these learners because regular classroom activities might not be interesting enough for them. The forth group consists of logical learners who think in a conceptual manner. They explore patterns and like to know how things work. They often ask questions and are good at puzzles, math problems, strategy games and computers. They understand abstract concepts faster than others. These students prefer inventing and building their own contraptions, for example, with toys (http://www.ehow.com/info_7881656_inventory-learning-styles-child.html#ixzz1MXMcJS9C). 1.3.1 Initial memorisation According to many researches, children have lots of problems when trying to remember and repeat parts of material or longer sentences. In a situation when a group of kindergarten children was asked to remember and repeat, they were passive and even did not take any action to do so. 8-year-old children are a slightly better and show some will to do what they were asked, although only the 10-year-old children and older pupils are able to deal with efficient memorization, data processing and are even able to organise new information to remember it better. According to this research, one can observe that at the beginning children can use only simple techniques and just after some time those techniques develop, become more complicated and fitted to individual preferences and styles. This fact is quite disturbing because during the very early school-years children are often required to remember mane, sometimes even complicated information like lyrics, grammar rules or definitions. On the o ther hand, children can easily learn their mother tongue, they widen their knowledge about society or nature quite fast. Children are often able to repeat the dialogue of their parents even if they seem not interested in it. In their first years, they are not aware of how their memory works. The flash memory term became very popular according to the discovered phenomena that some people have perfect perception and prefer things they saw rather than those which they listened to. It is a very important fact that children use flash memory in a metaphorical way because they mechanically transfer the received information to their memory. Everything seen by people is remembered for a very short time in their operation memory. For a long-term memorisation, it is useful to include various visual aids in the teaching process. Children are able to remember not only pictures but also many details from such pictures. However, sometimes a picture shown to a child may be slightly different, may h ave different colours or shapes (especially of those elements which amazed the child). Autistic children have a very efficient flash memory and after a few seconds they are able to memorise very complicated and detailed pictures; what is more, they do so without much effort. From the previously discussed research, one can deduct that only from the age of ten children can consciously memorise some facts for a longer time. More effective memory depends on which study techniques the child uses. Those study strategies consist of certain elements like: the level of consciousness and awareness of the aim the child is learning for and willingness the child hasmemorisation strategy effort used to learn a specific part of the material Sometimes it is very hard to prove which element from the ones mentioned above is used. It can be even said that children create memorization strategies in internalisation. Before a child creates its own technique of learning, a child cannot achieve better results in learning but when those strategies are already created, the child knows how to study to achieve his or her aim. Then, the process of memorisation becomes faster, easier and more efficient. After some time, children not only know how to learn faster but also can understand more and do this more freely. Nevertheless, at the age of six it is still very complicated for the young learner to organise material which has to be learnt, and this is why children start to repeat. Only nine-year-old children are consciously able to group certain pictures into categories to achieve better memorisation. To sum up, one can easily say that children develop their memorisation skills according to their age and in this process children reme mber those things which they pay attention to but it is short memory and at the same time hard memory which are used. Sensitivity on keeping memory on the alert and reaction do not depend on where this new information comes from (society, nature or their own body) but in case of children it is mainly automatically received and processed by their brain. This process happens quickly and almost without any effort and the teacher cannot see those processes and cannot stop or modify them. This process can be only stopped and controlled, but then it works much slower and requires some effort. What is more, a child has to be conscious of information and has to recognise it. To distinguish between automatic and controlled memorisation, one can distinguish three levels of the automatisation processes: the first level is dominated by the automatic use of information (also without paying attention) the second level is partially automatic when attention is not focused on information the third level is only rarely automatic but full attention is needed in this case ( E. Gruszczyk- KolczyÅ„ska, Ewa ZieliÅ„ska Wspomaganie dzieci w rozwoju zdolnoÅ›ci do skupiania uwagi i zapamiÄ™tywania WSiP Warszawa 2005: 52-68). 1.4 The theory how media influence children Media themselves may introduce lots of positive things but also the negative ones into the human life, shape attitudes and mentality of the young people. Furthermore, especially children may be easily influenced by commercials. Media contents are brought to people through the Internet, radio or television, and such media information consists of specific stimuli which affect brain, senses and create or change attitudes and ways of looking at the reality. The good side of the media is the fact that it is created for peoples development, making life more convenient, introducing social and personal values and causing that long distances are easier to overcome. As a result, even such aspects as education or culture are closer to various and separated nations. On the other hand, mass media become a kind of of a boundary or a cage in which a person is isolated from the others, as it may create a situation of misunderstanding and limit of ones social life which is then substituted with cyber space. Needless to say, the mass media caused radical reorganisation of the social life. In terms of education and upbringing of young generation, the media are creating new types of personalities, a sort of a new civilisation. This new generation of media-people is an inextricable part of the modern life, and can be source of many good, positive and improving aspects as well as bad, demoralising, violent and the ones encouraging unacceptable deviations. 1.4.1 Media in education The fact of striving for more effective ways of teaching is a main subject of many modern researches. Nowadays, in order to achieve the goal it is natural to use the most entertaining and universal tools like the Internet and other mass media. Thanks to these tools, learning can be more pleasant and successful for the learners and also easier and less effort-requiring for the teachers. More and more modern teaching techniques make education up-to-date and allow for leaving (old) traditional methods in education and introduce the modern model of integration of education with entertainment. In this context, education becomes a product, (almost a technological device), a source of educational tools and an incentive for the unconscious learning. Media may be easily and freely used not only in school teaching but also in private, out-school or even global, social, personal and cultural training. They can provide news, information and educational content using all possible multilingual tools. What is more, this kind of instrument has certain aspects which are singled out by Henryk GrudzieÅ„ in his work Media jako skÅ‚adnik procesu dydaktyczno-wychowawczego: direct influence this means that especially television programs and films immediately influence their audience (human emotions and intellect) building-up influence means building up information, associations and feelings connected with films or TV programs which cause some changes in the human psyche subconscious influence similar to the one above, but the audience is not conscious of changes in its attitudes because at the beginning the audience refuses the given way of thinking due to its unsuitable content and after some time its resistance disappears. Media also have a tremendous influence on the lifestyle of the young people, and they affect lots of spheres of young peoples lives, for example: the effect on the way that somebody behaves (making decisions, aggressive behaviour, social actions etc.) the effect on the level of knowledge (level of information, range of knowledge, level of communication skills etc.) the influence on attitude (believes, religion, judging of other people, etc.) the influence on physical fitness (damaging of senses, lack of motion, addiction) The processes mentioned above depend on many conditions such as age, psyche, actual situation in ones life, level of knowledge, weather, place of receiving such information or influences, company or gender. For example, the most influential may be a film watched in a cinema where the level of focus is very high, a bit weaker may be television and the weakest the radio. 1.4.2 The Internet in childrens education Nobody can deny that modern technology has changed and revolutionized education. Teachers have also quickly adjusted their teaching methods in a response to new technology because gadgets in the classroom can create a more interesting, interactive and entertaining environment. If schools strive to keep up with technological trends, then the learning that takes place there becomes more relevant and meaningful for the learners. The Internet and computer knowledge and literacy of major software programs is no longer reserved only for higher educational systems or special trade schools in the modern society. ( http://www.ehow.com/about_5410187_uses-modern-technology-classroom-teaching.html#ixzz1Iai4xP5X) Many children, when going to school, deal with individual difficulties on the basis of their opportunities. Nowadays, from the very early age, children get used to computers, the Internet and other modern technologies. The access and the use of the Internet fulfil many of the aims of education. What is more, it broadens childrens mind horizons, gives them a sense responsibility, builds up their self-esteem and develops their autonomy. A big advantage of the Web is its easy access and lack of duty to have a face-to-face contact. The author of the book Special educational needs and the Internet: issues for the inclusive classroom Chris Abbott claims that there are four principles and each one proves that websites and the Internet have become an influential tool for teaching as the pupils are: Informed The Internet is a source of information and news used in topic work, planning visits, web sites pictures of classmates work, connection with other pupils even outside the school, village or town and also link with past friends. Involved In the virtual tour, in preparing material, in creating and sharing their ideas; in group with the integrated activities where physical presence is not significant. Empowered enabling access for children with any physical difficulties, various tools, e-mails Recognised pictures on websites of the children and their work, whiles of the school council meeting, aiding successes and building self-esteem. (111-112) The Internet has a large part to play in the future education of the young people. In this book, the author included many useful tips when using computers in teaching young learners. For example, the page a teacher wants to use should be put on the screen before children come into the classroom. What is very important, computers should be set in a way so that the children cannot open unauthorized sites and also it is important to remind the children of behaving in a good way to prevent the pupils from running to get to the computers first. It is also useful to create a list of computer room rules. Wherever possible, there should be no more than three pupils per one computer. If children cannot see the screen, they may quickly lose interest in their school work and may not be willing to learn. All these elements can make children more concentrated and make learning more effective (C. Abbott Special educational needs and the Internet: issues for the inclusive classroom New York 2002).

Relationship Between Developed and Emerging Stock Markets

Relationship Between Developed and Emerging Stock Markets Introduction Due to inclination towards liberalization and deregulation in the capital and money markets, global markets have tended to become highly integrated in recent times in case of developed as well as developing countries. There are many reasons as to why the linkages among the different stock markets should be studied some of the reasons are emerging markets have attracted a great number of foreign investors, removal of statutory controls over their capital market and foreign exchange, stock prices interconnection due to the global capital movements, regional policy and the presence of economic ties. Specialists of finance have given substantial attention to the linkages and the relationships between different stock markets, to explore and examine the potential benefits from international portfolio diversification. Most of the studies are done taking into account developing and emerging Asian markets. Interest of foreign investors have resulted in several fund management centres concentrating on Asian developing markets not only for the growth and development but also to diversify their risk. The aim of this paper is to study the relationship of developed and emerging stock markets. Literatures on the different prospects of stock market have been studied. Many researchers have focused on the integration among the stock market. While studying the literatures it has been seen that different areas are being covered and focused which includes dynamic linkages among stock market during pre and post Asian financial crisis and Russian financial crisis, effect of linkages on the portfolio diversification, effects of linkages on the daily stock prices and domination of developed markets over the developing markets. Further, examining of the empirical question in the literature on capital market integration between different economies is done. For the empirical analysis, data of twenty year for everyday closing stock prices of six indices have been taken from 3 January 1989 to 8 June 2009. Six indices are New York Stock Exchange (USA), London Stock Exchange (UK), Tokyo Stock Exchange (Japan), Bombay Stock Exchange (India), The Stock Exchange of Thailand (Thailand), Bursa Malaysia (Malaysia). In the econometrics literature, there exist a number of alternative methods to estimate cointegration. Econometrics techniques which are being used in this study are Augmented Dickey-Fuller test, Johansen’s cointegration test and Error Correction test. E-views software is used for the calculating the results. Empirical results obtained from the three test, it was found that time series are non stationary and null hypothesis is not rejected which suggest that they are highly cointegrated and to test whether any variations in one stock exchange can lead to fluctuations in other stock indices. Johansen cointegration test is conduct ed which shows that there is no evidence of cointegration between Indian stock index and other stock indices. Further, Error Correction test is conducted which shows that there is poor cointegration between Indian stock exchange index with other stock indices. Indian stock market appear to be least integrated with Malaysia, where as Malaysia stock market is integrated with all the other stock markets. Thailand stock market is seems to be more dependent on Japanese and Indian stock market than other stock markets. Little integration is seen between Japanese stock exchange and USA stock exchange. It is found that UK and USA are highly integrated. To conclude, stock exchanges of the developed economies are better cointegrated as compared to those of developing economies. Background What is stock market? In simple words stock refers to a supply. But in financial market terms, stock refers to the money which a company has raised. And the supply of the money comes from the people who invest in the company in hope that the company will make their money grow. Stocks exist because it enables the company to â€Å"sell† pieces of the business called as stocks (equity securities) in need of long term financing. When stocks are issued by corporations are owned by the public at large which includes both private investors and institution are said to be publicly held. A public place where things are bought and sold is called as Market. And the term stock market refers to a business where stock is bought and sold. Stock market can be splitted into two main sectors; the primary market and the secondary market. The primary market is the one where new issues are offered for the first time and primary market is the one where subsequent trading goes on. There are basically two types of stock namely common stock and preferred stock. A security which represents ownership in a corporation is known as common stock. Holder of the common stock has the power to vote and elect board members. If the company goes bankrupt, the common stockholder will not be paid until unless creditors, bondholders and preferred stockholders are paid their share of the leftover assets of the company. Where as, preferred stock is a stock which is issued when all the common stock has been issued. Preferred stock olders are given dividends. They have a preference that is why they are paid dividend before any dividends are paid to common stock holders. The stock market is not a specific place but still some people use the term â€Å"Wall Street† which is the main street in New York City’s financial district and it is referred to the US stock market. Why companies issue stock market and why people buy it? As every company wants to grow, so some owners build more factories and some develop new product which needs money. A company can actually get loan from the financial institution like banks but companies without going into debt by taking loans issues stock which raise money for the growth of a company. Only Business Corporation can issue the stock which has special legal rights and responsibility. A proprietorship or ownership cannot issue stock. A shareholder invests in a hope that company will grow and so will their money grow because if a company earns money, the shareholders will share the profits. There are different types of gains from the stock such as dividends, capital gains, short selling, risk and rewards for investing. Over the long term bases, investments in stocks have proven to be an excellent way to more than keep pace with erosive effects of inflation. Stock Exchange Stock market is an organised market for trading of stocks and bonds. These markets were originally open to all but now a days only members of the association can buy and sell directly and these members or stock broker can buy and sell for themselves or others by charging the commission for their provided service. A stock can only be bought and sold if it is listed on an exchange. There are stock exchange in all the financial centres of the world. Some of them are stated below; the New York stock exchange since 1792 which had the largest trading in the world of $7.3 trillion in 1998, Tokyo stock exchange, London stock exchange, Bombay stock exchange and NASDAQ. NASDAQ was the first exchange which recognised the role of electronics in stock market. History of the Stock Exchanges Japan In the decade of 1870s, introduction of a securities system initiated the public bond negotiation in Japan which resulted in the need of a public institution for trading and hence in May 1878, the â€Å"Stock Exchange Ordinance† was in enacted followed by establishment of Tokyo Stock Exchange Co. Ltd. On May 15, 1879 and trading began on June 1st. On June 30, 1943, establishment of a quasi-public corporation named the â€Å"Japan Securities Exchange† took place by uniting all 11 stock exchanges throughout Japan. During the Second World War, the trading sessions were suspended on August 10, 1945 but the trading restarted under the management of unofficial group transactions in December 1945. Japan Securities Exchange was dissolved on April 16, 1947. Three stock exchanges in Tokyo, Osaka and Nagoya were founded on April 1, 1949 and trading began on May 16 followed by formation of five additional stock exchanges in July in Kobe (dissolved, October 1967), Hiroshima, Kyoto (merged into Tokyo Stock Exchange, March 2001), Fukuoka and Niigata. In the beginning of the next decade of 1950s, margin transactions were introduced and bond trading started on April 2, 1956. October 1, 1966 observed the first listings of government bonds after the Second World War and in the following year, a new process of auction was put into action and â€Å"Baikai† trades (off-exchange trades) were eliminated. In April 1968, registration system was replaced by licensing system for securities companies and on July 1, 1969, Tokyo Stock Price Index (TOPIX) was launched. Joining the International Federation of Stock Exchanges (FIBV) along with starting of convertible bonds trading and Book Entry Clearing system were the major developments by TSE before listing of Yen-based foreign bonds and opening of Foreign Stock Section in 1973. The next 10 years observed major developments in technical fields such as introduction of Market Information System (MIS) and Computer-assisted Order Routing and Execution System (CORES). From February 1, 1986 to May 23, 1988, a total of 32 securities companies joined the TSE membership out of which 22 were foreign companies. Trading in TOPIX futures, TOPIX options, U.S. T-Bond futures and Japanese government bond futures began by May 1990. Other 10 securities companies including 3 foreign ones joined the TSE membership followed by introduction of Floor Order Routing and Execution System (FORES) by the end of that year. Major happenings in the next decade were: Starting of Central Depository and Clearing System on Oct 9, 1991; Listing of Nikkei 300 Stock Index Listed Fund on May 29, 1995; Initiation of 5-year Japanese government bond futures trading on Feb 16, 1996; Trading in equity options on July 18, 1997; Calculation of new stock price index series on Apr 2, 1998; introduction of ToSTNet and TDnet (Timely Disclosure Network) in 1998; restriction on off-exchange trading for listed securities abolished on Dec 1, 1998; 50th Anniversary celebrations on Apr 2, 1999; introduction of Target (TSE wide area network) on June 1; brokerage commission liberalized in October; establishment of MOTHERS market for emerging companies and growth on Nov 11, 1999; and merging of Hiroshima and Niigata stock exchanges into TSE along with introduction of TSE ARROWS in 2000. Demutualization of TSE resulted in the formation of Tokyo Stock Exchange Inc. in 2001 and later on August 1, 2007, Tokyo Stock Exchange Group, Inc. was established. Tokyo Stock Exchange Regulation was established on October 17th with its commencement on November 1, 2007. Thailand The present Thai market’s origin starts from the early years of 1960s when a private group established a stock exchange in July 1962 as a limited partnership which later turned into a limited company under the name of Bangkok Stock Exchange Co. Ltd. (BSE) in 1963. But BSE was relatively inactive irrespective of its good foundation as its annual turnover values reduced from being 160 million baht in 1968 to an all time low of 26 million baht in 1972, even when turnover in debentures were 87 million baht. So finally, BSE stopped operating in early 1970s and the major reasons behind its failure were limited understanding of equity market among the investors and no government support officially. But, BSE’s concept was able to attract enough attention to form an organized securities market with official support. Hence, a plan to establish a market having apt facilities and regulations for securities trading was proposed by the Second National Economic and Social Development Plan (1967-1971). On recommendation of the World Bank in 1969, the government gained the works of Professor Sidney M. Robbins from Columbia University who studied different methods for the development of Thai capital market. And in the same year, the Bank of Thailand also created a working group for the development of capital market which was given the job of establishing the stock market. After a year of intensive study, Professor Robbins generated an all-inclusive report named â€Å"A Capital Market in Thailand† and this report turned out to be the master plan required for the Thai capital market development in future. In 1972, the government brought some changes to the â€Å"Announcement of the Executive Council No. 58 on the Control of Commercial Undertakings Affecting Public Safety and Welfare† according to which the government now controlled and regulated the operations related to finance and securities companies. â€Å"The Securities Exchange of Thailand† also known as SET was passed in May 1974 after the amendments were made followed by the amending of the Revenue Code by the year-end. By 1975, the legislative framework was put into action and official trading at SET started on April 30, 1975. January 1, 1991 saw the changing of name from â€Å"The Securities Exchange of Thailand† to â€Å"The Stock Exchange of Thailand†. Malaysia In 1930, Singapore Stockbrokers Association was Malaysia’s first formal securities business organisation establishment and in 1937 was re-registered by the name of Malayan Stockbrokers Association. The public shares trading began after the establishment of The Malayan Stock Exchange in 1960 and the board system was having its trading rooms in Kuala Lumpur as well as Singapore, connected by usage of direct telephone line. The year 1964 saw the foundation of the Stock Exchange of Malaysia but in 1965, the withdrawal of Singapore from Malaysia forced the Stock Exchange of Malaysia to become the Stock Exchange of Malaysia and Singapore. In 1973, the Stock Exchange of Malaysia and Singapore was divided into two separate markets namely the Kuala Lumpur Stock Exchange Berhad and the Stock Exchange of Singapore due to ceasing of interchangeability of currency between Malaysia and Singapore. The Kuala Lumpur Stock Exchange integrated on December 14, 1976 as a company limited by guarantee took over the operations and management of the Kuala Lumpur Stock Exchange Berhad. On April 14, 2004, the demutualization exercise made the name to be changed to Bursa Malaysia Berhad. The main aim of this exercise was to boost competitive position and to act in response to trends in the exchange sector globally by becoming more market-oriented and customer-driven. The listing of Bursa Malaysia on the Main Board of Bursa Malaysia Securities Berhad took place on 18 March 2005. The certifications for conformance to the ISO 9001:2000 Quality Management System and ISO 14001:2004 Environmental Management System standards were received by the exchange on 5 October 2007. Faster processing and execution of orders and providing wider trading functions and features were done by introduction of Bursa Trade Securities as a new trading platform in Dec 2008. United States The New York stock exchange trace back to 172, when twenty four New York City stock brokers and merchants signed the Buttonwood Agreement. At that time five securities were traded in New York City out of which three were government bonds and two were bank stocks. It was agreed that securities will be traded on commission basis on signing the Buttonwood agreement by the brokers. After the war in 1815 securities market in New York began to grow. The New York stock and exchange board was formed on March 8, 1817. The name was shortened The New York Stock Exchange (NYSE) in 1863. More than 2800 companies are listed in NYSE which are having value exceeding $15 trillion. During the period 1824 to 1830 annual trading reached a peak of 380,000 shares. Average volume reached to 8500 shares which show that it increased a 50-fold in seven years. During 1836-1853 NYSEB prohibited trading in the street and in 1837 average daily volume fell down from 7393 in January to 1534 by June. Due to invention of telegraph, brokers and investors broaden the market participation outside New York City. It was a panic period during 1857 when Ohio Life Insurance Trust company collapsed, prices dropped eight to ten percent in the single trading session and there was 45% decline in market value in the beginning of the year. During 1860s first stock ticker came into existence, membership in NYSE became a â€Å"property right†, prohibition of issue of shares in secret known as watering stock and at the end on 24th September 1869, gold speculation resulted in â€Å"Black Friday†. In 1890s NYSE established clearing house, it also recommended that all listed companies will send their shareholder the annual report and in 1896. The Dow Jones Industrial Average was published by the Wall Street journal for the first time, with an initial value of 40.74. During that period DJIA topped 100 for the first time. Federal Reserve System Wall Street became world financial leader. Centralized stock clearing system was established and fraud bureau was established during the period. In the mid of 1929 Black Thursday came when market crashed on volume of over 16 million shares which was the beginning of the Great depression and the Dow finally reached bottom in July 1932. During 1960-1979, International Federation of stock Exchange and daily volume on the NYSE exceeded 4 million shares nearly triple the level immediately following the war. On February 03, 1977 foreign broker were permitted membership on the floor. The Inter market Trading system (ITS) was inaugurated. Taking about 20th century, first Global index was launched in 2000, DJIA experienced its largest one day point gain and new trading room at 30 Broad street was opened. In 2001, NYSE volume topped 2 billion shares. The NYSE is now a for-profit business. It is formed out of the merger of the NYSE and Archipelago Holding, Inc. And the merger is the largest ever among securities up to this time. United Kingdom The London Stock Exchange is one of the world’s oldest stock exchanges and traces its history back more than 300 years. It started in the 17th century in London coffee houses. Exchange grew quickly and became the city’s most important financial institution. John casting began in back 1698 to organise the market in Jonathan’s coffee house through a simple list of stock and commodity prices. The wave of speculative fever known as the south sea bubble burst in 1720. In 1761 a group of stock broker form a club at Jonathan’s to buy and sell shares and then in 1773 they put up their own building in Sweeting’s Alley with dealing room and members named it â€Å"The Stock Exchange†. On 3 March 1801, first regulated exchange comes into existence in London and the business reopens under a formal membership basis and the modern stock exchange was born. First codified rule book was created in 1812 and first regional exchange were opened in Manchester and Liverpool in 1836 and it was rebuilt in 1854. A new deed settlement came to existence in 1876. In 1914 after Great War, the exchange market was closed from the end of July till the New Year. During 1986, there was deregulation of market which is known as ‘Big Bang’. Ownership of member firms by an outside corporation was allowed. Brokers were able to operate in a dual capacity and minimum scales of commission were abolished. Trading was moved to computers and telephones from separate dealing rooms. The exchange became private limited company under the Companies Act 1985. The trading name became â€Å"The London Stock Exchange† in 1991. In 1997, SETS (Stock exchange Electronic Trading System) was launched. In 2003, EDX London was created, a new international equity in partnership with OM Group and later in 2004, LSE moved to new headquarters Paternoster Square. Latest in 2007, LSE merged with Borsa Italiana, creating London Stock Exchange Group. India The Bombay Stock Exchange (BSE) is located in Dalal Street, Mumbai. It was established in 1875 and is one of the oldest stock exchanges in Asia. Around 3600 companies in the country are listed on this stock exchange and have a substantial trading volume. The market capitalization of the BSE is about Rs.20 trillion (US$ 466 billion). The ‘Sensex’ is commonly used market index for the BSE and it is among the five big exchanges in the world in terms of number of transactions. Its history traces back to the time in mid 1850s, when an informal group of 22 shareholders used to trade under banyan tree in the Town Hall of Bombay. The association the native sharebrokers was formally organized as The Bombay Stock Exchange in 1875. The BSE is the oldest stock exchange in Asia and Premchand Roychand used to be the leading sharebroker in that time. He was the one who assisted in setting out procedures and conventions for the trading of stock at BSE. James M. Maclean inaugurated the Brokers Hall in 1899. in 1928, it was shifted to an old building in Town Hall, Bombay and later on the building was constructed on Dalal Street in 1930 where the BSE building now stands. The BSE follows the system of eTrading, which came into use in 1995. In 2000, BSE Sensex was used to open its derivatives market for trading Sensex future contracts, followed by development of equity derivatives in 2001 and 2002 which expanded its trading platform. Stock exchanges by providing a centralized and ready market, facilitates the business for financing through flotation of bonds and stocks. Sometimes speculation in stock can put stress on the instability of an economy. The reality of the Great depression was emphasised by the stock market crash in 1929. Financial Crisis Stock market crash of 1929 After the First World War, there was a growth in industrialisation and new technologies. During 1920s was the time of peace and prosperity because the economy was benefited greatly from the new life changing technologies. Many investors quickly purchased the shares on seeing Dow Jones industrial average surged. Due to the powerful economic boom the stocks were seen very safe to most of the economists. Stocks were purchased by the investors on margin. From 1921 to 1929, the Dow Jones rocketed from 60 to 400 and for every dollar invested; a margin user would borrow 9 dollars worth of stock. But on Thursday October 24, 1929 the Dow Jones Industrial Average fell 38 points to 260, which was a drop of 12.8 percent and across the two days its average fell 23 percent and finally at the end of the period on November 11, there was a cumulative drop of 40 percent. Overvalued stocks, low margin requirements, interest rate hikes and poor banking structure were the few causes of the crash. In total, 14 billion dollars of wealth were lost during this market crash. Stock market crash of 1987 Dow hit a record 2722.44 points on 25 August, 1987 but then the Dow started to head down. And valuation in the United States dropped around 36 percent from the days between October 14 to October 19, 1987. On black Monday October 19, 1987 the Dow Jones Industrial Average plummeted 508 points losing approx 22.6 percent of its total value and SP 500 dropped to 20.4 percent. Reasons for the crash were no liquidity, overvalued stock, program trading and the use of derivative securities software. During the crash half trillion dollars wealth were lost. Stock market crash of 2008 The failures of financial organizations in the USA due to exposure of credit default swaps and subprime loans resulted in a global crisis as banks all over the world failed and the values of shares and commodities fell drastically. The Indonesian Stock Market stopped operating on seeing a 10% drop in a day on October 8. Comparisons were made of this crisis with the one in 1987 but that lasted for just one day whereas the present one lingered on for the whole week. Dow Jones saw its worst ever decline of 18% during the week commenced on October 6. The failure of banks in Iceland devalued the Icelandic Krona and forced the country to the verge of bankruptcy which was saved by an emergency loan from International Monetary Fund (IMF). The main index of Iceland had a 77% decrement. October 24 saw the worst downfalls for many countries whereas Dow Jones industrial average was somewhat better at 3.6%. The value of United States Dollar and Japanese Yen increased whereas that of British Pound and Canadian Dollar was among the major losers. Literature review 1.1 Introduction The competition among different industrial countries markets was witnessed by their respective national stock exchange markets during the late 1980s and the economists observed that linkage or interrelation between the global markets existed. Due to the less restrictive climate towards capital movements, economists actually started thinking that the major financial markets of the world are systematically interrelated. Growth can be seen in reaction towards external developments in macro-economic policies and the world financial environment due to this interrelation. Technological developments in communications, trading system and the innovations of financial products have created global international investment opportunities. Linkages among stock market have important implication and significance for security pricing, trading strategies, hedging and financial market regulations. And also the presence of short term and long term relationship may be used to attain financial gains from international portfolio diversification and to also reduce systematic risk. International Market linkages have been widely investigated. Several studies have been conducted explaining the empirical and theoretical issues on linkages amongst stock market and mainly focused on the co-movement between developed and emerging markets. There is a wealth of literature on stock market interdependence and integration. However, depending on the data, methodology, and theoretical models used there is no clear resolution of the issue yet. Some previous work has have found that international stock markets are integrated and some found that stock markets are not interlinked. Most of the studies on stock market interdependence in emerging markets have been done on geographical groups of markets, such as markets in Central and Eastern Europe  and America  and in Asian countries. Further, I summarize some of the most recent findings. 1.2 Interdependence of Stock Markets A number of studies have examined stock market linkages among emerging stock market and the developed stock markets like Arshanapalli, Doukas and Lang 1995 and Chen, Firth and Rui, 2002. Arshanapalli, Doukas  and Lang (1995) report that after the 1987 crash international market linkages have strengthened in terms of increased number of co-integrating vectors in the post crash period. They investigated in their paper that presence of a common random variable trend between the US and Asian stock market movements during the post October 1987 period. They showed that the cointergating structure which actually ties the stock market together has significantly increased since October 1987. US stock market influence on the other markets was considerably found greater in the post crisis period. Their results indicate that the Asian equity market is more integrated with US equity market than Japan equity market. Where as, Masih and Masih (1997) and Masih and Masih (1999) found cointegration relationship among the equity markets of Malaysia, Thailand, US, UK, Japan, Singapore and Hong-Kong during pre-financial crises period 1987. Number of papers investigates the short term and long term linkages among Central and Eastern Europe (CEE) stock exchanges. Talking about long term relationship, Gilmore and McManus (2002) and Gilmore and McManus (2003) analysed that no long term relationship can be established among the CEE stock markets with the US and Germany stock markets, where as Voronkova (2004) shows the existence of long term linkages among the Central European markets and CEE. Hamao and Masulis (1990), King and Wadhwani (1990), Kasa (1992) and Arshanapalli and Doukas (1993) have found that the equity markets of developed markets are integrated and US equity market leads the other developed market like Japanese equity market, UK equity market and few other European equity markets. Yang, Hsiao, Li and Wang (2005) also examined the long run price relationship and the dynamic price transmission among USA, Germany and four Eastern European emerging stock markets. They paid particular attention to Russian crisis in their study. VAR analysis was conducted. It was concluded that both long run relationship and the dynamic transmission were strengthen among these markets after the crisis and Germany became dominant and noticeable only after the Russian crisis amongst all the Eastern European markets. Syllignakis and Kouretas also examined the short and long term relationship between ten central Eastern European stock markets and two developed stock market i.e US and Germany, they used Gowzalo and Granger method and indicated weak partial integration among these markets. They also indicated that the four big stock exchange market like Republic, Hungary, Poland and Slovenia together with Germany and the US stock market have substantial permanent factor which drives the system of stock market exchange in the long run. Egert and Kocenda (2006) analyse the co-movement and interdependence among three stock markets in Western, Central and Eastern Europe and found no robust cointegration relationship for any of the stock index pairs. Data from 2003 to 2005 for stock indices have been taken and applied wide range of econometric techniques like unit root and stationary tests, cointergration tests, Granger causality test, VAR estimation have been used. Results show that there are signs of short term spillover effects both in terms of stock price and stock return volatility. Granger causality test show the existence of bidirectional causality for both returns and volatility series and limited number of short term relationships using VAR framework. Limited interaction has been found among the market in case of Poland and Hungary by Li and Majerowska (2007) and also showed that emerging markets are weekly linked to the developed markets by using GARCH approach .In this paper linkages between the emerging markets of Warsaw and Budapest with the established market in Frankfurt and US were studied by using four-variable asymmetric GARCH-BEKK model. At the end it was implied that by adding the stock in the emerging markets to their investment portfolio they may benefit from reducing the risk. Further, looking at some more European counties Lucey andVoronkova (2008) examined relationship Russia and other equity markets over the period of 1995-2004 by using number of co-integration approach like Gregory-Hansen test, a stochastic cointegration framework, the non-parametric test for unit root and cointegration and found Russian market does not show strong evidence of increased long run convergence either with regional or developed markets, so therefore correlation is low. They also stated that Russian equity market in the long run was isolated from the influence of international markets and structural break in August 1998 did not alter the long term relationship nature. Ozdemir, Olgun and Saracoglu (2008) examined dynamic linkages between the equity market of US representing the center and emerging market using the Granger causality test as a result showed significant causal relation to all emerging markets and conclude that there is no evidence in the literature suggesting an effect of an emerging stock exchange market to that of large markets like US, Japan and UK. Where as Chinzara, examined to what extent South Africa equity market is integrated into world equity market using cointegration, VECM and VAR model and taking data for period 1995-2007. He fi Relationship Between Developed and Emerging Stock Markets Relationship Between Developed and Emerging Stock Markets Introduction Due to inclination towards liberalization and deregulation in the capital and money markets, global markets have tended to become highly integrated in recent times in case of developed as well as developing countries. There are many reasons as to why the linkages among the different stock markets should be studied some of the reasons are emerging markets have attracted a great number of foreign investors, removal of statutory controls over their capital market and foreign exchange, stock prices interconnection due to the global capital movements, regional policy and the presence of economic ties. Specialists of finance have given substantial attention to the linkages and the relationships between different stock markets, to explore and examine the potential benefits from international portfolio diversification. Most of the studies are done taking into account developing and emerging Asian markets. Interest of foreign investors have resulted in several fund management centres concentrating on Asian developing markets not only for the growth and development but also to diversify their risk. The aim of this paper is to study the relationship of developed and emerging stock markets. Literatures on the different prospects of stock market have been studied. Many researchers have focused on the integration among the stock market. While studying the literatures it has been seen that different areas are being covered and focused which includes dynamic linkages among stock market during pre and post Asian financial crisis and Russian financial crisis, effect of linkages on the portfolio diversification, effects of linkages on the daily stock prices and domination of developed markets over the developing markets. Further, examining of the empirical question in the literature on capital market integration between different economies is done. For the empirical analysis, data of twenty year for everyday closing stock prices of six indices have been taken from 3 January 1989 to 8 June 2009. Six indices are New York Stock Exchange (USA), London Stock Exchange (UK), Tokyo Stock Exchange (Japan), Bombay Stock Exchange (India), The Stock Exchange of Thailand (Thailand), Bursa Malaysia (Malaysia). In the econometrics literature, there exist a number of alternative methods to estimate cointegration. Econometrics techniques which are being used in this study are Augmented Dickey-Fuller test, Johansen’s cointegration test and Error Correction test. E-views software is used for the calculating the results. Empirical results obtained from the three test, it was found that time series are non stationary and null hypothesis is not rejected which suggest that they are highly cointegrated and to test whether any variations in one stock exchange can lead to fluctuations in other stock indices. Johansen cointegration test is conduct ed which shows that there is no evidence of cointegration between Indian stock index and other stock indices. Further, Error Correction test is conducted which shows that there is poor cointegration between Indian stock exchange index with other stock indices. Indian stock market appear to be least integrated with Malaysia, where as Malaysia stock market is integrated with all the other stock markets. Thailand stock market is seems to be more dependent on Japanese and Indian stock market than other stock markets. Little integration is seen between Japanese stock exchange and USA stock exchange. It is found that UK and USA are highly integrated. To conclude, stock exchanges of the developed economies are better cointegrated as compared to those of developing economies. Background What is stock market? In simple words stock refers to a supply. But in financial market terms, stock refers to the money which a company has raised. And the supply of the money comes from the people who invest in the company in hope that the company will make their money grow. Stocks exist because it enables the company to â€Å"sell† pieces of the business called as stocks (equity securities) in need of long term financing. When stocks are issued by corporations are owned by the public at large which includes both private investors and institution are said to be publicly held. A public place where things are bought and sold is called as Market. And the term stock market refers to a business where stock is bought and sold. Stock market can be splitted into two main sectors; the primary market and the secondary market. The primary market is the one where new issues are offered for the first time and primary market is the one where subsequent trading goes on. There are basically two types of stock namely common stock and preferred stock. A security which represents ownership in a corporation is known as common stock. Holder of the common stock has the power to vote and elect board members. If the company goes bankrupt, the common stockholder will not be paid until unless creditors, bondholders and preferred stockholders are paid their share of the leftover assets of the company. Where as, preferred stock is a stock which is issued when all the common stock has been issued. Preferred stock olders are given dividends. They have a preference that is why they are paid dividend before any dividends are paid to common stock holders. The stock market is not a specific place but still some people use the term â€Å"Wall Street† which is the main street in New York City’s financial district and it is referred to the US stock market. Why companies issue stock market and why people buy it? As every company wants to grow, so some owners build more factories and some develop new product which needs money. A company can actually get loan from the financial institution like banks but companies without going into debt by taking loans issues stock which raise money for the growth of a company. Only Business Corporation can issue the stock which has special legal rights and responsibility. A proprietorship or ownership cannot issue stock. A shareholder invests in a hope that company will grow and so will their money grow because if a company earns money, the shareholders will share the profits. There are different types of gains from the stock such as dividends, capital gains, short selling, risk and rewards for investing. Over the long term bases, investments in stocks have proven to be an excellent way to more than keep pace with erosive effects of inflation. Stock Exchange Stock market is an organised market for trading of stocks and bonds. These markets were originally open to all but now a days only members of the association can buy and sell directly and these members or stock broker can buy and sell for themselves or others by charging the commission for their provided service. A stock can only be bought and sold if it is listed on an exchange. There are stock exchange in all the financial centres of the world. Some of them are stated below; the New York stock exchange since 1792 which had the largest trading in the world of $7.3 trillion in 1998, Tokyo stock exchange, London stock exchange, Bombay stock exchange and NASDAQ. NASDAQ was the first exchange which recognised the role of electronics in stock market. History of the Stock Exchanges Japan In the decade of 1870s, introduction of a securities system initiated the public bond negotiation in Japan which resulted in the need of a public institution for trading and hence in May 1878, the â€Å"Stock Exchange Ordinance† was in enacted followed by establishment of Tokyo Stock Exchange Co. Ltd. On May 15, 1879 and trading began on June 1st. On June 30, 1943, establishment of a quasi-public corporation named the â€Å"Japan Securities Exchange† took place by uniting all 11 stock exchanges throughout Japan. During the Second World War, the trading sessions were suspended on August 10, 1945 but the trading restarted under the management of unofficial group transactions in December 1945. Japan Securities Exchange was dissolved on April 16, 1947. Three stock exchanges in Tokyo, Osaka and Nagoya were founded on April 1, 1949 and trading began on May 16 followed by formation of five additional stock exchanges in July in Kobe (dissolved, October 1967), Hiroshima, Kyoto (merged into Tokyo Stock Exchange, March 2001), Fukuoka and Niigata. In the beginning of the next decade of 1950s, margin transactions were introduced and bond trading started on April 2, 1956. October 1, 1966 observed the first listings of government bonds after the Second World War and in the following year, a new process of auction was put into action and â€Å"Baikai† trades (off-exchange trades) were eliminated. In April 1968, registration system was replaced by licensing system for securities companies and on July 1, 1969, Tokyo Stock Price Index (TOPIX) was launched. Joining the International Federation of Stock Exchanges (FIBV) along with starting of convertible bonds trading and Book Entry Clearing system were the major developments by TSE before listing of Yen-based foreign bonds and opening of Foreign Stock Section in 1973. The next 10 years observed major developments in technical fields such as introduction of Market Information System (MIS) and Computer-assisted Order Routing and Execution System (CORES). From February 1, 1986 to May 23, 1988, a total of 32 securities companies joined the TSE membership out of which 22 were foreign companies. Trading in TOPIX futures, TOPIX options, U.S. T-Bond futures and Japanese government bond futures began by May 1990. Other 10 securities companies including 3 foreign ones joined the TSE membership followed by introduction of Floor Order Routing and Execution System (FORES) by the end of that year. Major happenings in the next decade were: Starting of Central Depository and Clearing System on Oct 9, 1991; Listing of Nikkei 300 Stock Index Listed Fund on May 29, 1995; Initiation of 5-year Japanese government bond futures trading on Feb 16, 1996; Trading in equity options on July 18, 1997; Calculation of new stock price index series on Apr 2, 1998; introduction of ToSTNet and TDnet (Timely Disclosure Network) in 1998; restriction on off-exchange trading for listed securities abolished on Dec 1, 1998; 50th Anniversary celebrations on Apr 2, 1999; introduction of Target (TSE wide area network) on June 1; brokerage commission liberalized in October; establishment of MOTHERS market for emerging companies and growth on Nov 11, 1999; and merging of Hiroshima and Niigata stock exchanges into TSE along with introduction of TSE ARROWS in 2000. Demutualization of TSE resulted in the formation of Tokyo Stock Exchange Inc. in 2001 and later on August 1, 2007, Tokyo Stock Exchange Group, Inc. was established. Tokyo Stock Exchange Regulation was established on October 17th with its commencement on November 1, 2007. Thailand The present Thai market’s origin starts from the early years of 1960s when a private group established a stock exchange in July 1962 as a limited partnership which later turned into a limited company under the name of Bangkok Stock Exchange Co. Ltd. (BSE) in 1963. But BSE was relatively inactive irrespective of its good foundation as its annual turnover values reduced from being 160 million baht in 1968 to an all time low of 26 million baht in 1972, even when turnover in debentures were 87 million baht. So finally, BSE stopped operating in early 1970s and the major reasons behind its failure were limited understanding of equity market among the investors and no government support officially. But, BSE’s concept was able to attract enough attention to form an organized securities market with official support. Hence, a plan to establish a market having apt facilities and regulations for securities trading was proposed by the Second National Economic and Social Development Plan (1967-1971). On recommendation of the World Bank in 1969, the government gained the works of Professor Sidney M. Robbins from Columbia University who studied different methods for the development of Thai capital market. And in the same year, the Bank of Thailand also created a working group for the development of capital market which was given the job of establishing the stock market. After a year of intensive study, Professor Robbins generated an all-inclusive report named â€Å"A Capital Market in Thailand† and this report turned out to be the master plan required for the Thai capital market development in future. In 1972, the government brought some changes to the â€Å"Announcement of the Executive Council No. 58 on the Control of Commercial Undertakings Affecting Public Safety and Welfare† according to which the government now controlled and regulated the operations related to finance and securities companies. â€Å"The Securities Exchange of Thailand† also known as SET was passed in May 1974 after the amendments were made followed by the amending of the Revenue Code by the year-end. By 1975, the legislative framework was put into action and official trading at SET started on April 30, 1975. January 1, 1991 saw the changing of name from â€Å"The Securities Exchange of Thailand† to â€Å"The Stock Exchange of Thailand†. Malaysia In 1930, Singapore Stockbrokers Association was Malaysia’s first formal securities business organisation establishment and in 1937 was re-registered by the name of Malayan Stockbrokers Association. The public shares trading began after the establishment of The Malayan Stock Exchange in 1960 and the board system was having its trading rooms in Kuala Lumpur as well as Singapore, connected by usage of direct telephone line. The year 1964 saw the foundation of the Stock Exchange of Malaysia but in 1965, the withdrawal of Singapore from Malaysia forced the Stock Exchange of Malaysia to become the Stock Exchange of Malaysia and Singapore. In 1973, the Stock Exchange of Malaysia and Singapore was divided into two separate markets namely the Kuala Lumpur Stock Exchange Berhad and the Stock Exchange of Singapore due to ceasing of interchangeability of currency between Malaysia and Singapore. The Kuala Lumpur Stock Exchange integrated on December 14, 1976 as a company limited by guarantee took over the operations and management of the Kuala Lumpur Stock Exchange Berhad. On April 14, 2004, the demutualization exercise made the name to be changed to Bursa Malaysia Berhad. The main aim of this exercise was to boost competitive position and to act in response to trends in the exchange sector globally by becoming more market-oriented and customer-driven. The listing of Bursa Malaysia on the Main Board of Bursa Malaysia Securities Berhad took place on 18 March 2005. The certifications for conformance to the ISO 9001:2000 Quality Management System and ISO 14001:2004 Environmental Management System standards were received by the exchange on 5 October 2007. Faster processing and execution of orders and providing wider trading functions and features were done by introduction of Bursa Trade Securities as a new trading platform in Dec 2008. United States The New York stock exchange trace back to 172, when twenty four New York City stock brokers and merchants signed the Buttonwood Agreement. At that time five securities were traded in New York City out of which three were government bonds and two were bank stocks. It was agreed that securities will be traded on commission basis on signing the Buttonwood agreement by the brokers. After the war in 1815 securities market in New York began to grow. The New York stock and exchange board was formed on March 8, 1817. The name was shortened The New York Stock Exchange (NYSE) in 1863. More than 2800 companies are listed in NYSE which are having value exceeding $15 trillion. During the period 1824 to 1830 annual trading reached a peak of 380,000 shares. Average volume reached to 8500 shares which show that it increased a 50-fold in seven years. During 1836-1853 NYSEB prohibited trading in the street and in 1837 average daily volume fell down from 7393 in January to 1534 by June. Due to invention of telegraph, brokers and investors broaden the market participation outside New York City. It was a panic period during 1857 when Ohio Life Insurance Trust company collapsed, prices dropped eight to ten percent in the single trading session and there was 45% decline in market value in the beginning of the year. During 1860s first stock ticker came into existence, membership in NYSE became a â€Å"property right†, prohibition of issue of shares in secret known as watering stock and at the end on 24th September 1869, gold speculation resulted in â€Å"Black Friday†. In 1890s NYSE established clearing house, it also recommended that all listed companies will send their shareholder the annual report and in 1896. The Dow Jones Industrial Average was published by the Wall Street journal for the first time, with an initial value of 40.74. During that period DJIA topped 100 for the first time. Federal Reserve System Wall Street became world financial leader. Centralized stock clearing system was established and fraud bureau was established during the period. In the mid of 1929 Black Thursday came when market crashed on volume of over 16 million shares which was the beginning of the Great depression and the Dow finally reached bottom in July 1932. During 1960-1979, International Federation of stock Exchange and daily volume on the NYSE exceeded 4 million shares nearly triple the level immediately following the war. On February 03, 1977 foreign broker were permitted membership on the floor. The Inter market Trading system (ITS) was inaugurated. Taking about 20th century, first Global index was launched in 2000, DJIA experienced its largest one day point gain and new trading room at 30 Broad street was opened. In 2001, NYSE volume topped 2 billion shares. The NYSE is now a for-profit business. It is formed out of the merger of the NYSE and Archipelago Holding, Inc. And the merger is the largest ever among securities up to this time. United Kingdom The London Stock Exchange is one of the world’s oldest stock exchanges and traces its history back more than 300 years. It started in the 17th century in London coffee houses. Exchange grew quickly and became the city’s most important financial institution. John casting began in back 1698 to organise the market in Jonathan’s coffee house through a simple list of stock and commodity prices. The wave of speculative fever known as the south sea bubble burst in 1720. In 1761 a group of stock broker form a club at Jonathan’s to buy and sell shares and then in 1773 they put up their own building in Sweeting’s Alley with dealing room and members named it â€Å"The Stock Exchange†. On 3 March 1801, first regulated exchange comes into existence in London and the business reopens under a formal membership basis and the modern stock exchange was born. First codified rule book was created in 1812 and first regional exchange were opened in Manchester and Liverpool in 1836 and it was rebuilt in 1854. A new deed settlement came to existence in 1876. In 1914 after Great War, the exchange market was closed from the end of July till the New Year. During 1986, there was deregulation of market which is known as ‘Big Bang’. Ownership of member firms by an outside corporation was allowed. Brokers were able to operate in a dual capacity and minimum scales of commission were abolished. Trading was moved to computers and telephones from separate dealing rooms. The exchange became private limited company under the Companies Act 1985. The trading name became â€Å"The London Stock Exchange† in 1991. In 1997, SETS (Stock exchange Electronic Trading System) was launched. In 2003, EDX London was created, a new international equity in partnership with OM Group and later in 2004, LSE moved to new headquarters Paternoster Square. Latest in 2007, LSE merged with Borsa Italiana, creating London Stock Exchange Group. India The Bombay Stock Exchange (BSE) is located in Dalal Street, Mumbai. It was established in 1875 and is one of the oldest stock exchanges in Asia. Around 3600 companies in the country are listed on this stock exchange and have a substantial trading volume. The market capitalization of the BSE is about Rs.20 trillion (US$ 466 billion). The ‘Sensex’ is commonly used market index for the BSE and it is among the five big exchanges in the world in terms of number of transactions. Its history traces back to the time in mid 1850s, when an informal group of 22 shareholders used to trade under banyan tree in the Town Hall of Bombay. The association the native sharebrokers was formally organized as The Bombay Stock Exchange in 1875. The BSE is the oldest stock exchange in Asia and Premchand Roychand used to be the leading sharebroker in that time. He was the one who assisted in setting out procedures and conventions for the trading of stock at BSE. James M. Maclean inaugurated the Brokers Hall in 1899. in 1928, it was shifted to an old building in Town Hall, Bombay and later on the building was constructed on Dalal Street in 1930 where the BSE building now stands. The BSE follows the system of eTrading, which came into use in 1995. In 2000, BSE Sensex was used to open its derivatives market for trading Sensex future contracts, followed by development of equity derivatives in 2001 and 2002 which expanded its trading platform. Stock exchanges by providing a centralized and ready market, facilitates the business for financing through flotation of bonds and stocks. Sometimes speculation in stock can put stress on the instability of an economy. The reality of the Great depression was emphasised by the stock market crash in 1929. Financial Crisis Stock market crash of 1929 After the First World War, there was a growth in industrialisation and new technologies. During 1920s was the time of peace and prosperity because the economy was benefited greatly from the new life changing technologies. Many investors quickly purchased the shares on seeing Dow Jones industrial average surged. Due to the powerful economic boom the stocks were seen very safe to most of the economists. Stocks were purchased by the investors on margin. From 1921 to 1929, the Dow Jones rocketed from 60 to 400 and for every dollar invested; a margin user would borrow 9 dollars worth of stock. But on Thursday October 24, 1929 the Dow Jones Industrial Average fell 38 points to 260, which was a drop of 12.8 percent and across the two days its average fell 23 percent and finally at the end of the period on November 11, there was a cumulative drop of 40 percent. Overvalued stocks, low margin requirements, interest rate hikes and poor banking structure were the few causes of the crash. In total, 14 billion dollars of wealth were lost during this market crash. Stock market crash of 1987 Dow hit a record 2722.44 points on 25 August, 1987 but then the Dow started to head down. And valuation in the United States dropped around 36 percent from the days between October 14 to October 19, 1987. On black Monday October 19, 1987 the Dow Jones Industrial Average plummeted 508 points losing approx 22.6 percent of its total value and SP 500 dropped to 20.4 percent. Reasons for the crash were no liquidity, overvalued stock, program trading and the use of derivative securities software. During the crash half trillion dollars wealth were lost. Stock market crash of 2008 The failures of financial organizations in the USA due to exposure of credit default swaps and subprime loans resulted in a global crisis as banks all over the world failed and the values of shares and commodities fell drastically. The Indonesian Stock Market stopped operating on seeing a 10% drop in a day on October 8. Comparisons were made of this crisis with the one in 1987 but that lasted for just one day whereas the present one lingered on for the whole week. Dow Jones saw its worst ever decline of 18% during the week commenced on October 6. The failure of banks in Iceland devalued the Icelandic Krona and forced the country to the verge of bankruptcy which was saved by an emergency loan from International Monetary Fund (IMF). The main index of Iceland had a 77% decrement. October 24 saw the worst downfalls for many countries whereas Dow Jones industrial average was somewhat better at 3.6%. The value of United States Dollar and Japanese Yen increased whereas that of British Pound and Canadian Dollar was among the major losers. Literature review 1.1 Introduction The competition among different industrial countries markets was witnessed by their respective national stock exchange markets during the late 1980s and the economists observed that linkage or interrelation between the global markets existed. Due to the less restrictive climate towards capital movements, economists actually started thinking that the major financial markets of the world are systematically interrelated. Growth can be seen in reaction towards external developments in macro-economic policies and the world financial environment due to this interrelation. Technological developments in communications, trading system and the innovations of financial products have created global international investment opportunities. Linkages among stock market have important implication and significance for security pricing, trading strategies, hedging and financial market regulations. And also the presence of short term and long term relationship may be used to attain financial gains from international portfolio diversification and to also reduce systematic risk. International Market linkages have been widely investigated. Several studies have been conducted explaining the empirical and theoretical issues on linkages amongst stock market and mainly focused on the co-movement between developed and emerging markets. There is a wealth of literature on stock market interdependence and integration. However, depending on the data, methodology, and theoretical models used there is no clear resolution of the issue yet. Some previous work has have found that international stock markets are integrated and some found that stock markets are not interlinked. Most of the studies on stock market interdependence in emerging markets have been done on geographical groups of markets, such as markets in Central and Eastern Europe  and America  and in Asian countries. Further, I summarize some of the most recent findings. 1.2 Interdependence of Stock Markets A number of studies have examined stock market linkages among emerging stock market and the developed stock markets like Arshanapalli, Doukas and Lang 1995 and Chen, Firth and Rui, 2002. Arshanapalli, Doukas  and Lang (1995) report that after the 1987 crash international market linkages have strengthened in terms of increased number of co-integrating vectors in the post crash period. They investigated in their paper that presence of a common random variable trend between the US and Asian stock market movements during the post October 1987 period. They showed that the cointergating structure which actually ties the stock market together has significantly increased since October 1987. US stock market influence on the other markets was considerably found greater in the post crisis period. Their results indicate that the Asian equity market is more integrated with US equity market than Japan equity market. Where as, Masih and Masih (1997) and Masih and Masih (1999) found cointegration relationship among the equity markets of Malaysia, Thailand, US, UK, Japan, Singapore and Hong-Kong during pre-financial crises period 1987. Number of papers investigates the short term and long term linkages among Central and Eastern Europe (CEE) stock exchanges. Talking about long term relationship, Gilmore and McManus (2002) and Gilmore and McManus (2003) analysed that no long term relationship can be established among the CEE stock markets with the US and Germany stock markets, where as Voronkova (2004) shows the existence of long term linkages among the Central European markets and CEE. Hamao and Masulis (1990), King and Wadhwani (1990), Kasa (1992) and Arshanapalli and Doukas (1993) have found that the equity markets of developed markets are integrated and US equity market leads the other developed market like Japanese equity market, UK equity market and few other European equity markets. Yang, Hsiao, Li and Wang (2005) also examined the long run price relationship and the dynamic price transmission among USA, Germany and four Eastern European emerging stock markets. They paid particular attention to Russian crisis in their study. VAR analysis was conducted. It was concluded that both long run relationship and the dynamic transmission were strengthen among these markets after the crisis and Germany became dominant and noticeable only after the Russian crisis amongst all the Eastern European markets. Syllignakis and Kouretas also examined the short and long term relationship between ten central Eastern European stock markets and two developed stock market i.e US and Germany, they used Gowzalo and Granger method and indicated weak partial integration among these markets. They also indicated that the four big stock exchange market like Republic, Hungary, Poland and Slovenia together with Germany and the US stock market have substantial permanent factor which drives the system of stock market exchange in the long run. Egert and Kocenda (2006) analyse the co-movement and interdependence among three stock markets in Western, Central and Eastern Europe and found no robust cointegration relationship for any of the stock index pairs. Data from 2003 to 2005 for stock indices have been taken and applied wide range of econometric techniques like unit root and stationary tests, cointergration tests, Granger causality test, VAR estimation have been used. Results show that there are signs of short term spillover effects both in terms of stock price and stock return volatility. Granger causality test show the existence of bidirectional causality for both returns and volatility series and limited number of short term relationships using VAR framework. Limited interaction has been found among the market in case of Poland and Hungary by Li and Majerowska (2007) and also showed that emerging markets are weekly linked to the developed markets by using GARCH approach .In this paper linkages between the emerging markets of Warsaw and Budapest with the established market in Frankfurt and US were studied by using four-variable asymmetric GARCH-BEKK model. At the end it was implied that by adding the stock in the emerging markets to their investment portfolio they may benefit from reducing the risk. Further, looking at some more European counties Lucey andVoronkova (2008) examined relationship Russia and other equity markets over the period of 1995-2004 by using number of co-integration approach like Gregory-Hansen test, a stochastic cointegration framework, the non-parametric test for unit root and cointegration and found Russian market does not show strong evidence of increased long run convergence either with regional or developed markets, so therefore correlation is low. They also stated that Russian equity market in the long run was isolated from the influence of international markets and structural break in August 1998 did not alter the long term relationship nature. Ozdemir, Olgun and Saracoglu (2008) examined dynamic linkages between the equity market of US representing the center and emerging market using the Granger causality test as a result showed significant causal relation to all emerging markets and conclude that there is no evidence in the literature suggesting an effect of an emerging stock exchange market to that of large markets like US, Japan and UK. Where as Chinzara, examined to what extent South Africa equity market is integrated into world equity market using cointegration, VECM and VAR model and taking data for period 1995-2007. He fi