Windows 2000 essays

Windows 2000 expositions When settling on a working framework to use there are numerous things that ought to be taken a gander at, for example, the equipment, programming that is accessible for the working framework, the all out cost included, which incorporates equipment and programming, what sort of UI is accessible, and what it is doing in the market. The market could impact what kind of help is out there for the working framework. Equipment prerequisites for a working framework (entirely any product) are an entertaining thing. Everybody needs them to mean something other than what's expected. The product makers are centered around selling their product and have a stake in getting however much of the buyers cash as could be expected. The equipment sellers have a stake (like the product merchant) in amplifying their a lot of procurement dollars. The framework purchaser needs to make the base speculation important to help their necessities. A very much educated purchaser understands that equipment costs are continually dropping and they would prefer not to overbuy on equipment. Given the entirety of this, equipment prerequisites are regularly a mishmash to the extent a particular guide for what you should buy. A shrewd equipment buy is mapped to explicit necessities and benchmarked against comparative executions. One further entanglement that will influences the examination is, an endeavor UNIX server will be found in a bigger server farm facilitating venture class applications, for example, an ERP or database. Windows 2000 servers might be found in similar organizations; in any case, they will give a managerial capacity (e.g., facilitating a common drive or giving system validation administrations). Windows 2000 is generally basic. It is intended to work with for all intents and purposes any Pentium class processor. It requires 128 MB of RAM (256 MB suggested) and bolsters up to 4GB. Later forms of the framework will probably bolster more slam and they relocate to 64bits. In any event 1 gigabyte of hard plate space is required for a ... <!

Free Movement of Persons Within the European Union essays

Free Movement of Persons Within the European Union expositions Free development of people rights can be viewed as a layered degree of bundles turning around the major idea of the laborer. Rights and commitments emerge out of the essential need to guarantee the free development of one of the fundamental components of creation in the network. Delineate this announcement with case law and an investigation of the principle guideline in this field. In what regions does the connection with the laborer idea no longer should be so solid? Opportunity of development for people and the annulment of controls at inside boondocks shapes some portion of a more extensive idea, that of the interior market, wherein it isn't workable for inward wildernesses to exist or for people to be hampered in their developments. The idea of the free development of people has changed in importance since its beginning. The main arrangements regarding the matter alluded just to the free development of people considered as monetary specialists, either as workers or suppliers of administrations. The first financial idea has slowly augmented to take on a progressively broad importance associated with the possibility of Union citizenship, autonomous of any monetary action or differentiations of nationality. Article 2: The Union will set itself the accompanying goals (...)to keep up and build up the Union as a territory of opportunity, security and equity, in which the free development of people is guaranteed related to fitting measures regarding outside fringe controls, haven, movement and the anticipation and battling of wrongdoing, Article 14 ECT: Establishing the inside market including the free development of people. The inside market will include a zone without inward boondocks wherein the free development of products, people, administrations and capital is guaranteed as per the arrangements of this Treaty. Article 18 ECT: Union residents reserve the option to move and live unreservedly inside the domain of the Member States. Each resident of the Union will h... <!

Apathy in The Stranger Essays

Lack of concern in The Stranger Essays Lack of concern in The Stranger Paper Lack of concern in The Stranger Paper Article Topic: Writing The Stranger In The Stranger, Albert Camus depicts the principle character of the novel, Meursault, as a generally passionless character. Directly from the earliest starting point of the novel, when his mom dies, something a great many people would consider as very heartbreaking, his impassive demeanor is made obvious. This disposition proceeds all through the novel, and can be unmistakably observed in Meursaults collaborations with different characters. One such association is among him and Marie, when she endeavors to converse with him about marriage. The most unmistakable case of Meursaults lack of concern, be that as it may, is seen when he slaughters the Arab. This emotionless disposition of Meursaults perseveres all through the novel, and is obvious in his associations with outsiders, to his sentimental connections, right through to his associations with his close family. Directly from the initial two sentences of the novel, Camus as of now paints perusers an image of Meursault as being detached. Maman kicked the bucket today. Or then again yesterday perhaps, I dont know (Camus 3). The way that he discusses his moms passing so impassively is a conspicuous articulation of his unconcerned nature. While the facts demonstrate that Meursault truly doesn't have the foggiest idea about the subtleties of his moms passing, for every one of that was said in the wire from the home (Camus 3) was Mother expired. Memorial service tomorrow (Camus 3). Along these lines, one would expect that Meursault would have hustling musings of what the conditions were encompassing Mamans passing. This isn't the situation, however, as his first musings are the way he will take the two oclock transport and arrive toward the evening. That way [he] can be there for the vigil and returned tomorrow evening (Camus 3). The way that his first concern is in effect aback home at the earliest opportunity is an unmistakable understanding into his unconcerned nature. Once Meursault gets to the burial service home and converses with the executive, his unresponsiveness keeps on appearing and it gets clear to perusers that he was emotionless to his mom even while she was alive, as he says to the heading, I didnt go [to visit Maman] much this previous year It took up my Sunday also the difficulty of getting to this transport, purchasing tickets, and going through two hours voyaging (Camus 5). At that point, as the executive keeps on conversing with him, Meursault concedes that he wasnt truly listening any longer (Camus 5). It shows up as though Meursault Is not in any event, paying attention to his moms demise by any stretch of the imagination, which is likewise observed when he napped off for some time (Camus 9) during Mamans vigil. In this manner, perusers can see, through his relationship, or absence of relationship, with his mom, and his aloofness towards her passing, that Meursault is an on a very basic level indifferent individual. In the wake of getting back after Mamans vigil, Meursault chose to take a dip [so he] got a trolley to go to the open sea shore (Camus 19). At that point, while at the sea shore, Meursault ran into Marie Cardona whom [hed] felt weak at the knees over at that point (Camus 19). It shows up as though he was concentrating a ton of consideration on her, as he notes little insights concerning her, for example, that her hair was in her eyes and she was snickering (Camus 20), that an irregular bystander would not have taken note. It begins to appear as though Meursault at long last met somebody who can bring a type of feeling out of him. This can be surmised by Meursaults activities towards Marie, for example, when he let [his] head fall back and lay on her stomach (Camus 20), and when he put [his] arm around her midsection, and [they] swam together (Camus 20). After they went through the night together at his home, Meursault attempted to locate the salty smell Maries hair had left on the cushion (Camus 21). It is activities like what pioneer perusers to accept that Meursault is truly creating affections for Marie, and that he will at last have the option to figure out how to straightforwardly communicate feeling. Things being what they are, be that as it may, this is simply not the situation. As Meursaults relationship with Marie creates, perusers begin to see his lack of concern once more, however Marie obviously doesnt. Marie dropped by to see me and inquire as to whether I needed to wed her (Camus 41), Meursault says. The way that Marie proposed to Meursault can imply that she felt that they were prepared to take their relationship to the following level, yet had no sign from him that he would request her hand, so she needed to step up to the plate. At that point, Meursaults answer, I said that it didnt have any effect to me and that we could in the event that she needed to (Camus 41), affirms this presumption. He proceeds to state, I most likely didnt love her (Camus 41). That implies that Meursault really didn't have any expectations of wedding Marie, but instead was utilizing her for his own pleasure. Their relationship, as indicated by him, was minimal more than physical. Additionally, the reality Meursault had such an easygoing mentality towards marriage shows that he doesn't generally think much about it. Accordingly, the early introduction that perusers get about Meursaults disposition towards Marie is uncontrollably deceptive, as it made perusers begin to accept that Meursault may really have some kind of feelings inside him that he had the option to communicate. At long last, in any case, Meursaults relationship with Marie is at last another case of the amount of an impassive individual Meursault genuinely is. The most conspicuous case of how Meursaults associations with others permit perusers to see his feeling of lack of concern, in any case, is his encounter with the Arab. Meursault initially asserted that he was venturing towards the Arab trying to escape from the sparkling sun, however he at that point says, I realized that it was moronic, that I wouldnt get the sun off me by venturing forward. Yet, I made a stride, one stage, forward (Camus 59). It was simply subsequent to seeing Meursault move towards him that the Arab drew him blade and held it up to [Meursault] (Camus 59). Along these lines, Meursault potentially realized that by making that solitary stride, he would cause an issue between the Arab and himself. By the by, he despite everything couldn't have cared less, and kept on making that stride. It is then that Meursaults detached aura turns out to be considerably increasingly obvious in his relationship with the Arab, when he shots the Arab, particularly on the grounds that he appears as though he is shooting the Arab not in view of their past issue, yet rather as a result of his displeasure towards the warmth. Meursault utilizes the relationship of a blade to depict the sun. With respect to the sun, he says It resembled a long glimmering sharp edge cutting at my temple that cut at my eyelashes and wounded at my stinging eyes (Camus 59). In spite of the fact that this was because of the way that the Arab brought his blade up in any case on the grounds that, after he rose it, the light shot off the take (Camus 59) towards Meursault, it isn't as though the Arab intentionally expected for that to occur, since he was simply bringing his blade up in self protection. It was just Meursaults lack of concern defeating him, so much in actuality that, considerably after he shot the Arab once, he discharged four additional occasions at the unmoving body (Camus 59). Connections that the vast majority would hold important to them, for example, that with their mom, or with their life partner, appear to make no difference to Meursault. Despite the fact that Meursault doesn't have an individual relationship with the Arab, ending the life of another person doesn't appear to fluster Meursault, either. In this manner, it is these connections that Meursault has with others all through the novel that show Meursaults aloof nature. They are basic parts of the plotline of the story, as they consider the entire topic of existentialism to be built up, utilizing Meursaults lack of care as a prime representation of this topic.

War Horse

Introduction : â€Å"Incredible. Lovely. Genuinely astonishing. I was unable to live without this book! †Ã¢ Ella from Hampshire. â€Å"This was the best book I have ever perused. Words can't portray how great it was. Simply read it. †Ã¢ Jordan from America. â€Å"I thought War Horse was splendid! It is the most contacting book I have ever perused, and I would prescribe it to anybody, regardless of whether they aren't creature sweethearts! † agrees Megan from Stafford. This is perhaps the best book I have ever perused and I would prescribe it to everybody as it contacts the hearts of any animalâ lover, yet it additionally shows you the terrifying states of the First World War and the hardships they more likely than not confronted. †Ã¢ Grace from England. â€Å"This book was prescribed to me by aâ friendâ and to place it into a couple words†¦ I adored it. I giggled and cried, I love perusing. † Jessica from Tamworth. Plot : The story is desc ribed by the pony, Joey †which I wasn’t expecting.He tells the peruser of his involvement with the homestead where he is raised by Albert, his involvement with France during the war and of the kinships he makes en route. He sees some horrendous things in France, a considerable measure of death and hurt, however what radiates through this book is love †he has individuals care for him and he grows dazzling kinships with numerous individuals in the book. He has Albert, the kid who raised him and prepared him on the ranch; Topthorne, an individual pony in war with him and Emilie, a little Frenchâ girlâ who cares for both him and Topthorne while they are stayed outdoors at her grandfather’s farm.Friendship is the key factor in this book, and it can obviously be seen all through the book. Told through the eyes of the book’s hero, Joey the pony, the story figures out how to give an unbiased articulation on the attrocities of war. Joey, a tall red pure blood who blows the mind from any individual who sees him, is taken from his stable in Devon and tossed into a combat area. Here he meetsâ friendsâ and adversaries, however the differentiation between the two did not depend on German versus English.He relates with the individuals who are pleasant and fears the individuals who compromise him. It is Joey’s kinships that help make the book function just as it does. Equestrian companion Topthorn offers trust when depression encompasses them while neighborly officials and energetic German Emillie just have Joey’s eventual benefits on a fundamental level. It is Joey’sâ relationshipâ with unique proprietor Albert that is generally contacting, the two just being isolated by the surge of war.The bold and cheerful language utilized all through the book is motivating, as is Joey’s duty to his companions. There are some genuinely stressing minutes at the finish of the book while the clear snapshots of fight take the t ruth of war back to the peruser. Joey’s will and assurance, maybe best connoted in his binding together stumble into no man’s land, is rousing and structures the core of the book. Not only a children’s book, War Horse is a brilliant, if rather nerve racking, read, recounting to the narrative of fellowship conquering the repulsions of war.Script-wise, War Horseâ is nothing to send you jogging home having seen a firmly drawn play. The elated outcome you'll feel toward the end happens due to the glorious manikins. There are different winged animals (vultures, larks and one cheeky goose), yet it's the ponies, of courses, that make this a ticket worth purchasing †once for you, and a couple of more occasions as early Christmas presents forâ yourâ friends and family. They won't require anything more.Designed by Adrian Kohler and Basil Jones for South Africa's Handspring Puppet Company, Joey and his full-developed pony co-star, Topthorn, are life-size, smooth manifestations each puppeteered by three people (Christopher Mai, Derek Stratton and Rob Laqui for the red pure blood Joey; and Jon Hoche, Danny Beiruti and Aaron Haskell for the dark magnificence Topthorn). Manikins whose controllers are taking into account the crowd, (for example, in bunraku, the nearest style to what we arrive) are a triumph when you quit seeing their people. That happens shockingly soon here. Nearly immediately.The puppeteers, in outfits of the time like different entertainers playing human characters, move smoothly and firmly as one exquisite brute, which is an accomplishment when you consider that the pony is exceedingly effortless for such a huge warm blooded creature. The trio make the equine sounds together, and give Joey a particular character through developments of the ears, tail and head. In any case, the play wouldn't be close to as effective or well known without the sharp structure and easy mobility of the pony manikins. There's an enemy of war story here, yet the greater topic is the romantic tale among man and creature. What's more, at last, among crowd and showiness.

Report profiling a service organisation Essay Example | Topics and Well Written Essays - 4000 words

Report profiling a help association - Essay Example Toward the finish of the paper, further suggestions have been given, which may additionally add to the lodging chain’s achievement and development. Inns have been viewed as one of the principle players in the travel industry and friendliness industry. The inn division has likewise been considered to have had the option to give a huge number of employments to individuals everywhere throughout the world. In any case, what with the numerous lodging organizations everywhere throughout the present reality, there is a requirement for the usage of appropriate administration methodologies to ensure that inns can constantly serve their visitors, just as keep their representatives. The author has chosen to concentrate on the administration systems of the Hilton Hotels gathering, which started in the United States and has stayed to be one of the top inn and resorts chain on the planet. It was in the year 1919, when a specific Conrad Hilton purchased his first lodging which was known as The Mobley, situated in Cisco, Texas. Quick forward to six years after the fact, and Hilton figured out how to construct his first lodging in Dallas which he named ‘The Hilton.’ This was the start of a long history of chain of inns the nation over and the organization figured out how to assemble inns abroad also. The Hilton Group currently involves around 500 inn networks everywhere throughout the world, with 60,000 representatives in around 50 nations. The whole gathering id separated into four worldwide locales. These are in particular, Europe, the UK and Ireland, the Middle East and Africa, Asia Pacific and South America. In the USA, it is the Hilton Hotel Corporation (or HCC) that is responsible for the country’s activities (Maxwell and Lyle, 2002). Visitors pay the inn to be spoiled and the lodging must guarantee that the visitors get their money’s worth, and that's only the tip of the iceberg. In the event that the visitor can have a decent encounter and is happy with the hotel’s administration, at that point the lodging can be guaranteed that the visitor would come back to remain again at their inn (Stoller, 2006). Hilton’s administration has been declining for the recent years, and

Another Day, Another Class

Another Day, Another Class So as promised earlier, this week Im highlighting another one of my classes, 7.05 Biochemistry. Class Details: Lecture: 3 times a week for 1.5 hours Recitation: Once a week for 1 hour Problem Sets: 8, not graded Exams: 4, graded Final Exams: 0 This class is also taught by three different professors: Michael Yaffe David Bartel Gene Brown Interesting tidbit #1: Professor Yaffe is from Baltimore and his dialect is very strong. Thus, he pronounces what we know as H20 as woodur. Too bad I dont have a sound recording of it. Tidbit #2: Professor Yaffe is also an MD. Thus, to prove it to us and also demonstrate the effects of EDTA (ethylenediaminetetraacetic acid) on blood, he drew blood from the head TA in front of the entire lecture in 10-250. So basically, this class is designed to teach us about basic biochemistry, so were learning about proteins, lipids, carbohydrates and how they exist in the body. So far, its been pretty good. Today, in lecture, we learned about epinephrine. And of course, what would an MIT class be without some form of software associated with it. In his last day lecturing us, Professor Yaffe put up a transparency with a picture of his favorite computer game offered by Mad Scientist Software. (I thought he was joking). At this point, I took out my laptop and tried to validate his software allegations. Surprisingly, the game Cardiac Arrest actually exists. Being the gamer that I am, I decided to play and while the graphics were decent at best, I definitely realized Im not cut out to be premed. Oh wellgrad school here I come.

Research On The Two Types Of Ppp Finance Essay - Free Essay Example

There are two forms of purchasing power parity. The first one is according to the theory of law of one price which states that, the cost of an identical products sold in different countries should be the same expressing a common currency. The other one is the relative version of PPP, assumption of transport costs and imperfect competition are being considered in this version. Gustav Cassel started the first research on PPP in 1918, nowadays, the theory of PPP have applied on international finance widely. Policy maker viewed PPP as a significant indicator regard to the performance of domestic currency against the foreign currencies and used it to forecast the movement of exchange rate in long run. The purchasing power parity theory acts a key part in macroeconomic policy decision made by government. Within the project, the Purchasing Power Parity for Hong Kong, Japan and South Korea will be analysis, where Hong Kong is the domestic country. The economy of Hong Kong itself heavily depends on trade and financial services, base on her well known free trade and low tax rate system. Hong Kong nowadays was developed as the financial, trading and shipping centre of Asia. Besides of Mainland China, Japan is one of the largest trading partners with Hong Kong. Therefore, I will test Hong Kong against Japan. In order to make a comparison, I will also test Hong Kong against South Korea. The reason that I chose South Korea is because both economies are the member of Four Asian Tigers, they maintaining exceptionally high growth rates and rapid industrialization between the early 1960s and 1990s. Therefore I will test Hong Kong against South Korea, base on the similar nature of the economy between two regions. Nevertheless, according to studies did in the recent past, the topic itself showed different results. But, most of the studies do agreed that real exchange rates can be generally estimated in long run. Through the stationarity analysis and cointegration analysis, I can show whether PPP holds between Hong Kong and Japan, as well as Hong Kong and South Korea. Literature review The University of Pennsylvania (commonly referred to as Penn) documented a series of studies on a modern relationship between income and price known as Penn Effect  [1]  . The main findings shows that, between high and low income countries, the real income ratios are systematically exaggerated by gross domestic product (GDP) conversion at market exchange rates. . This is because; countries with higher incomes consistently had higher prices of domestically produced goods relative to prices of goods included in the exchange rate. Applying this logic to the project, PPP of the countries with similar income are more likely to hold. Therefore, PPP for Hong Kong and South Korea should hold in the long run. The Big Mac Index  [2]  is an example for explaining the concept of purchasing power parity in an informal way and economists widely cite the index as a reasonable real world measurement of PPP. The method of obtaining the Big Mac PPP exchange rate is dividing the price of a Big Mac in the home country (in its currency) by the price of a Big Mac in the foreign country (in its currency). If the value is lower than the actual exchange rate, it implies that the home currency is under-valued, compared with the foreign. In the other hand, if the value is high than the actual exchange rate, it means that the home currency is over-valued. Through the Big Mac Index we may know how well each currency against the dollars, nevertheless, the performance of PPP between the home currencies against dollar itself was not been showed. The reason for this can be the ingredient of making a Big Mac. As both traded and non-traded goods are used in the process, but in different countries, non-traded goods such as labour cost may various. At McDonald UK, a working staff may receive higher wage than a working stuff in China, which means other input cost for the Big Mac may have variation; therefore, the Big Mac price is different in two countries. Theory of Purchasing Power Parity By applying Purchasing Power Parity (PPP) theory, policy makers are able to make forecasts of the long run trend of exchange. There are two different forms of Purchasing Power Parity, which is absolute and relative version. According to the basic theorem of purchasing power parity, which states that one unit of home currency could purchase the same amount of goods in both domestic and foreign country. It ignored some distortions such as transport costs and imperfect competition which implies that absolute PPP are unlikely to hold. The law of one price is derived from the idea of perfect arbitrage. It states that all identical goods should have equal amount of price in a competitive market. Base on the PPP theory, arbitrage will occur due to an agent try to construct a profit through exchange rate transaction. For instance, a can of coke worth 50p in Britain and in France is ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€šÃ‚ ¬1, and then the exchange rate is  ¿Ãƒâ€šÃ‚ ¡0.5/ÃÆ' ¢Ãƒ ¢Ã¢â€ š ¬Ã… ¡Ãƒâ€šÃ‚ ¬1. Nevertheless, if the exchange rate is lower, means that sterling has appreciated against Euros. As a result, sterling is more valuable, and people can use the same amount of pounds to consume more coke in France. As people try to make yield through buying sterling, the exchange rate will move back to the original equilibrium level in long run. That is recognized as the absolute PPP. The absolute PPP: S represent nominal exchange rate, p for domestic price and p* for the foreign price. The relative price of the two currencies is represented by the nominal exchange rate. Absolute PPP are unlikely to hold because of several assumptions such as the existence of administrative cost and different types of imperfect competitions are being ignored. This is the reason for the existence of other version of PPP called the relative PPP. Some of the distortions such as transportation costs were taken into account by the theory of relative PPP. In the recent past, some studies showed that, even taking distortions into consideration, the relative version do hold in the long run. The relative PPP: In the relative version of PPP, S stand for the change of the nominal exchange rates in percentage; P for the change in price of domestic country in percentage and P* for the change in price of foreign country in percentage. According to the relative PPP formula above, adjustment of the exchange rates will be made due to the inflation discrepancy between the two countries. The common model for testing PPP through regression study: St = logged exchange rate, Pt= logged domestic price P*t= logged foreign price Ut= error term showing deviation from PPP. In a short conclusion, the theory of PPP show the way of determining exchange rate by checking the percentage change in domestic price and foreign price. The exchange rate performance within two economies is tracked by the economic modeling of purchasing power parity. The countrys perf ormance on trade can be estimated by policymaker if they understand how the PPP theory works. Beside of that, up to date monetary and fiscal policies could be made. Descriptive Data analysis The data I used in the project are mainly collected from GMID (Global Market Information Database) and Hong Kong Census and Statistics Department. The exchange rate and the Consumer Price Index (CPI) of both home and foreign country are the main variables of the PPP Econometric model. I have collected the exchange rate as well as the Consumer Price Index from Hong Kong, South Korea and Japan. The time period of the data is 1980-2009, all of the figures are annual average. The data in monthly and quarterly was not being used due to seasonality and avoiding dishonesty in my findings. In order to make sure the fairness of the test, all the annual data of CPI was being adjusted and the base year of it was set as 2005 automatically. From the Figure 1 of appendix, the actual value of the consumer price index for all three economies is being described. The Hong Kong economy achieved a rapid growth from 1980-1997. Start from 1980s, Hong Kong focus in developing services sector such a s financial services, real estate, insurance, brokering and banking, in late 1980, Hong Kong is being one of the largest financial markets in the world. Nevertheless, in 1997, Hong Kong is in the same situation like many other South East Asian countries which suffered in the financial crisis. Consumer confidence is being damaged significantly which reflect by the plunge in the consumer price index. Up until the end of 2003, the consumer price index starts to rebound. The CPI of Japan increased steadily from 1981 to 1990, but in late 1990s, the growth slowed obviously. Some economists believe that it is because the failure of bank of Japan cut interest rates rapidly enough to offset after-effects of burst of investment bubble during the late of 1980s. Start from the late 80s, Japan mainly specialized in developing manufacturing industry such as electronic and car industry. Until 90s, the developments of its manufacturing industry are highly successful. From the figure 1.2, we c an see that Japans economy affected by the Asian financial crisis is far from the other South East Asian countries. From figure 1.3, the South Korea consumer price index maintains a steady growth throughout 1980 to 2009, even though it has been suffer in financial crisis in 1997. South Korea experienced a rapid industrialization since 1980s, therefore we believe that the main force for supporting its growth is by attracting huge amount of foreign direct investments and a large volume of trade. Nowadays, the economy of South Korean is ranked the fourth in Asia and 15th of universe. Figure 2 shows the fluctuation of the exchange rates within Hong Kong and Japan, and also Hong Kong and South Korea. From Figure 2.1, since 1980 to 1995, the Hong Kong dollar had continued to depreciate against the Japanese dollar reaching HK$0.08/Yen ¿Ãƒâ€šÃ‚ ¥ In 1995, when the yen strike an all time peak the dollar, valuing Japans economy slightly larger than the United States in nominal GD P. Japan becomes the largest economy in world for just a short period of time due to that. The Japanese dollar started to depreciate in order to aid its export. In 1997, Hong Kong had suffered in the financial crisis, the Hong Kong dollar depreciated against Japanese dollar. From 2000-2009, the Hong Kong dollar against the Japanese dollar had fluctuated between 0.65 to 0.80 From Figure 2.2, since 1980-1989, the Hong Kong dollar against the South Korea Won had continued to depreciate reaching HK$0.012/SKW 1. After 1990, Hong Kong dollar began to appreciate up till 1997. In 1997, Both Hong Kong and South Korea were suffered in Asia financial crisis. After that, the South Korea Won had appreciated again as its economy started to recuperate. Stationarity analysis The theory of stationarity states that if the process of stochastic is strictly stationary, the probability law of the data is not time dependent. It means if any consecutive subset of the time series is being taken, its joint distribution function is identical to any other subsets. This implies a stationary series will have both finite variance and constant mean. Therefore, the time series mean will be independent to time t. If we use the non-stationary time series data to compute the analysis, spurious regression will be given by the misleading result. From Figure 3.1, 3.2 3.3, analysis within my data are showed by the correlogram. The data is being logged in order to check for randomness. I run the analysis with 3 lag values. If the data exceeds the critical value of 0.36, then the data itself is non-stationary All my data showed in above figure are being logged and non-stationary. If the data is stationary, the correlogram and its lag value will come up with close to zero. The graphs of spectral density from figure 4.1, 4.2 4.3, showed that there is a non-stationary sign such as zero peak and had dramatically decline from 0 to 0.5 within three countries. These imply that all the logged variables for CPI are non stationary. As seen in Figure 5, the correlogram analysis of CPI showed the logged variables of exchange rates are non-stationary because all the values are exceed the critical value line. The spectral density for the exchange rates in Figure 6 shows that there is also non-stationary sign such as zero peak, and radically decline from 0.0 to 0.5. Therefore, through correlogram and spectral density analysis, all the logged data for Consumer Price Index and the foreign exchange rates could be concluded as non-stationary. Stationarity analysis at I(0) In appendix Table 1, all the data are gathered and analysis by the software PC GIVE. For the log variable of Hong Kong CPI, the lowest AIC value is -7.413 and its corresponding t-adf value is -1.787 at lag 1. That is not within the 5% critical value, therefore, my null hypothesis cannot be rejected. Thus, the data itself is said to be non-stationary. For the log variable of Japan CPI, the lowest AIC value is -9.322 and its corresponding t-adf value is -2.000 at lag 1. That is not within the 5% critical value and that means I cannot reject the null hypothesis. Thus, the data itself is also said to be non-stationary. For the log variable of South Korea CPI, the lowest AIC value is -7.980 and its corresponding t-adf value is -1.718 at lag 1. My null hypothesis cannot be rejected because the t-adf value is not within the 5% critical region, therefore, the data itself is said to be non stationary. Throughout the unit root analysis above, Both Hong Kong, Japan and South Korea have non-stationary data. This is same as the visual analysis. Nevertheless, I will still using further plot to check whether the data are stationary or not. According to Figure 7, all the logged variables of CPI are being plotted. All of them are seem to be converged around 2005. The reason for that is because the CPI is all adjusted to a base year equal to 2005. The definition of stationarity states that the mean should independent to time t. Therefore, the result of the unit-root test in previous should be rejected because all values are showed to be non-stationary at I (0). For the exchange rate LHKD/YEN, the lowest AIC value is -4.682 and its corresponding t-adf value is -3.264. the result is within the 5% critical value. Therefore, the LHK per Yen is said to be stationary. That is contradicting with the visual judgment I worked in previous. For the exchange rate LHKD/WON, the lowest AIC value is -4.214 and its corresponding AIC value is -1.081. This shows that it is not within the 5% critical value region, therefore, data is said to be non-stationary. This is same as the visual analysis I did before. All my variables are showed to be non-stationary through the unit root test and the graphical analysis,. In order to precede the further analysis of stationarity, I should carry on the test on the first difference of the data. Stationarity analysis I(1) From Appendix Table 2, it shows the result of first differencing with 4 lag values in the unit root test. The null hypothesis is showed to be larger than -3.00 at 5% critical value, and my alternative hypothesis will be showed to be lower than -3.00 at 5% critical value. Base on the result for first difference of log value of Hong Kong CPI, the least AIC value is -7.438 and its corresponding t-adf value is -0.9655 at 0 lag. This value is not within the 5% critical value region. Thus, my null hypothesis cannot be rejected which implies that my log data for Hong Kong CPI is still non-stationary at first difference level. From Figure 8, it shows the analysis of the variable for log Hong Kong CPI in first difference level in correlogram and the spectral density. Both of the analysis support the previous unit root test result, therefore, the variable is still to be showed as non-stationary. From Figure 9, the actual value of the HK CPI at first difference level is plotted. Ther e is not much fluctuations were showed in the graph within the series, therefore, the previous result of unit root test is supported by that. Within the graph, we may see that the Asia financial crisis in 1997 is being reflected by the outlier. Base on the result for first difference of log value of Japan CPI, the least AIC value is -9.201 and its corresponding t-adf value is -2.125. The value is not within the 5% critical value region. Thus, my null hypothesis cannot be rejected and the data is said to be still non-stationary. From Figure 10, it shows the analysis of the variable of log Japan CPI in first difference level in correlogram and the spectral density. Both of the analysis support the previous unit root test result, therefore, the variable is still to be showed as non-stationary. In figure 11, the actual value plot of the DLJAPCPI shows that the variable has some characteristics of stationarity as there is several degree of fluctuation around the mean. Base on the result for first difference of log value of South Korea CPI, the least AIC value is is -7.902 and its corresponding t-adf value is -2.863 at lag 0. The value is not within the 5% critical value region. Thus, my null hypothesis cannot be rejected and the data is said to be still non-stationary. Nevertheless, from Figure 12, characteristic of stationarity are showed in my correlogram and the spectral density analysis, this contradicts my previous unit root test result. The actual value of the DLSKRCPI is plotted in Figure 13, characteristics of stationarity are showed in the graph as several fluctuations are around the mean. It contradicts the unit root test I worked in previous. Therefore, second difference level of the data is needed to be analysed in order to check whether the variable are stationarity or not. For the log exchange rate for HKD/YEN in first difference level, the lowest AIC value is -4.345 and its corresponding t-adf value is -3.540at lag 0. The value i s within the 5% critical value, Therefore the null hypothesis is needed to be rejected, implies that the HKD/YEN is stationary. The correlogram and the spectral density in Figure 14 both support the result above, as characteristic of stationarity is showed to be within the variable. Figure 15, is the actual value plot of the DLHKD/YEN. Characteristics of stationarity are shown in the graph as we can see there are several degrees of fluctuations around the mean. Thus, the previous result of the unit root test are being supported. In order to check the stationarity, further analysis is needed to carry on the second difference level for the variable. For the log exchange for HKD/KRW in first difference level, the lowest AIC value is -4.151 and its corresponding t-adf value is -3.875. Again, I need to reject my null hypothesis which means the HKD/KRW is stationary. In Figure 16, it shows the analysis of the I(1) of the variable of log HKD/KRW in first difference level in cor relogram and the spectral density. Characteristics of stationarity within the variable are shown in graph. Therefore, the previous result for unit root test is being supported. The actual value of DLHKD/KRW is being plotted in Figure 17, The plot showed some characteristics of stationarity as there is several degree of fluctuations around the mean. There is a noticeable shock exists within the data which started from 1995 up until 1998, which can be explained the Asian Financial crisis. Stationarity Analysis for I(2) From Appendix Table 3, all the log variables are being analyses in second difference level through unit root test. For the log variables of CPI for Hong Kong in second difference level, the lowest AIC value is -7.376 and its corresponding t-adf value is -3.340. It means I could reject my null hypothesis and accept the alternative one as the value is within the 5% critical value region. Thus, the log variable of CPI for Hong Kong at second difference level is shown to be stationary. In Figure 18, the log variables in second differencing are shown in the correlogram and the spectral density graph. It shows stationarity within the graph, and this supported the previous result of the unit root test. In Figure 19, the actual value of the variable are plotted. The graph showed some characteristics of stationarity as there is several degrees of fluctuations around the mean. Nevertheless, two excessive shocks were shown within the graph. The first one exists from 1997-1999, which can be explained the Asian Financial crisis. The other one exist start from 2007, which can be explained the worldwide financial crunch. For the log variables of Japan CPI in second difference level, the lowest AIC value is -9.049 and its corresponding t-adf value -4.226. It means I could reject my null hypothesis and accept the alternative one as the value is within the 5% critical value region. Thus, the log variable of CPI for Japan at second difference level is shown to be stationary. In Figure 20, the log variable of Japan CPI in second difference level is shown in the correlogram and the spectral density graph. Characteristic of stationarity exists in both graphs within the second differencing. My previous result for unit root test is being supported. In Figure 21, is the actual value of the variable are being plotted. There are several fluctuations shown around the mean. Within the plot, we may discover that there is one excessive shock. Japan suffered considerably f rom a recession in 2007 and its consumer confidence is being affected significantly, which is reflected by the actual value plot. For the log variable of South Korea CPI in the second difference level, the lowest AIC value is -7.711 and its corresponding t-adf value is -6.907. It means I could reject my null hypothesis and accept the alternative one as the value is within the 5% critical value region. Thus, the log variable of CPI for South Korea at second difference level is shown to be stationary. In Figure 22, the log variables of South Korea CPI are shown in the correlogram and the spectral density graph. Characteristic of stationarity do exists in both graphs within the second differencing. It means my previous result for unit root test is being supported. In Figure 23, the log variable of South Korea CPI in second difference level is being plotted. Within The graph, we may also discover that several fluctuation are around the mean, this is the characteristic of stationar ity. Nevertheless, there is one outlier we believe that is caused by Asia Financial Crisis that occurred in 1997. In that year, the economy of South Korea was suffered significantly from a recession. For the analysis of the exchange rates in second difference level, the lowest AIC value for HKD/YEN is -4.622 and its corresponding t-adf value is -6.008. This is within the 5% critical value region. Therefore I can reject my null hypothesis, therefore the data is said to be stationary. In Figure 24, the log variables of exchange rate for HKD/YEN in second difference level are shown in the correlogram and the spectral density. Stationarity are existed within the both graphs and these do support my unit test result. In Figure 25, the actual value of the exchange rate in second difference level is plotted, Characteristic of stationarity are shown within the series as there is several degree of fluctuations around the mean. I believe that the excessive shocks were caused by the As ia Financial Crisis which happened in 1997 and this also support my previous result. For the the log variables of exchange rate HKD/KRW in second difference level, the lowest AIC value is -3.779 and its corresponding t-adf value is -5.497. I could reject my null hypothesis and accept the alternative one as the value is within the 5% critical value region. Thus, the data at second difference level is shown to be stationary. In Figure 26, the correlogram and the spectral density graphs shows analysis for the variable for the exchange rate. As the variable are shown to be stationary with both graphs, which support my previous analysis in the unit root test In Figure 27, the actual value of the exchange is being plotted. Several degrees of fluctuations were shown around the mean. Thus, exchange rate is said to be stationarity. Same as the previous actual value plot, one excessive shock was showed within the graph. Through the analysis of the log variable in second difference level, all the data are shown to be stationary at I(2). Ordinary Least Square Estimation and Cointegration Analysis and its interpretation In this section, the performance of the PPP will be analysed by the econometric modelling. The tool which will be used is the Cointegration analysis, in concurrence with the residual from the Ordinary Least Square estimation. Cointegration may be formally defined as: The components of the vector Xt are said to be cointegrated of order d,b (denoted Xt ~ (I(d,b)) if: All components of Xt are I(d) There exists a vector ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±(ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã‚ °Ãƒâ€šÃ‚  0) such that Zt = ÃÆ'Ã… ½Ãƒâ€šÃ‚ ± Xt ~ I(d-b) b0 For instance, if a set of variables are said to be time dependent. However, through cointegration analyse, it can be said that they are cointegrated at the order of (d,b) if a stationary error term is given out. Take the above equation as an example, Yt and Xt can be non-stationary variable. Nevertheless, in case both Yt and Xt are cointegrated, the error term ut can still be stationary. Through the cointegration process, the non-stationary degree will be eliminated. This implies that misleading analysis will not be given out. My testable hypothesis: In logs: Strong form (absolute PPP) ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±=0 ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1=1 ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2=-1 Weaker form: ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±ÃƒÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã‚ °Ãƒâ€šÃ‚  0 ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1= ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã‚ °Ãƒâ€šÃ‚  1 so that: Weak form ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±ÃƒÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã‚ °Ãƒâ€šÃ‚  0 ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã‚ °Ãƒâ€šÃ‚   ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã‚ °Ãƒâ€šÃ‚  1 so that: With ut such that the relationship is stable in time. Through augmented Dickey-Fuller test, Durbin-Watson test, MacKinnon critical values and several graphical analysis, the residual from the OLS estimation will be exanimate. Thus, if the residual is stationary, we can assume the theory of PPP is being supported by the regression in long run. In order to ensure my accuracy of the analysis, the cointegrating regression Durbin-Watson (CRDW) test is introduced . The CRDW test suggests that if the series with no autocorrelation, then the DW value will go to two. In roughly speaking, if the Durbin-watson statistic is substantially less than 2, it shows there is a positive correlation of the data; If the value is substantially larger than 2, It shows there is successive error terms which are negatively correlated. In regressions, this mean there is an underestimation of the statistical significance level. Analysis for Hong Kong and Japan In Table 4, the results for Hong Kong against Japan through the OLS estimation are showed. The result of DW statistic is 0.718. The regression may contain autocorrelation. Therefore, we may know the price and the exchange rate is not co-integrated. The R-square of the regression is 0.853751. The regression may have perfect predictability if it contains with a R-square equal to 1. So, in this table, 0.853751 implies that PPP is well predicting in these two countries. The coefficient of log variable for CPI of Hong Kong (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1) and CPI of Japan (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2) is -0.0919722 and 4.62565 respectively. However, the domestic economy Hong Kong shows the positive signs of coefficient and the coefficient of Japan is negative. A weak form of PPP IS appeared as ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã‚ °Ãƒâ€šÃ‚  -ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã‚ °Ãƒâ€šÃ‚  1. In Table 5, the result of the ADF test is showed. The lowest AIC value is -4.526 and its corresponding t-adf v alue is -3.674. This means it failed to reach the 1% critical region, therefore it seems to have stationary within analysis. In order to check whether there is cointegration for the level terms. Additional graphical analysis is needed. In Figure 28, the test for the residual at I(0) is shows by the correlogram and the spectral density. Although characteristics of stationary are shown in the results of the ADF test, that is contradicted by the graphical analysis. Base on the correlogram graphical analysis, the first lag is above the critical value. In the ADF test, the correspondent t-adf value in lag 0 is -2.183, which is within the 5% critical value. Thus, the regression shows weak stationarity and co-integration do not exists between the consumer price index and the exchange rate. From Figure 29, The actual value of the residual at I(0) is plotted. There are not much fluctuations around the mean in the plot and also showed that there is no cointegration within the level term s, The ADF test and the graphical analysis do support that result. Therefore, The Ordinary Least Square estimation is needed to carry out at first difference level I(1). In Table 6, the OLS results for Hong Kong and Japan at first difference level I(1) is showed. It may contain autocorrelation within the regression as the result of DW statistic is 1.64. Nevertheless, through the CRDW test, there is a possibility of cointegration at I(1). The R-Square is 0.229002, which means the analysis is not a high-quality indicator for tracking the the performance of the PPP for Hong Kong and Japan. The coefficient of log variable of Hong Kong CPI (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1) and the log variable of Japan CPI DLJAP CPI (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1) is 0.377666 and -0.640497 respectively. In this analysis, the sign of the coefficient matched my expectation as a positive coefficient is given out by the domestic economy Hong Kong and a negative coefficient is given out by the foreign country Japan. For Table 7, the unit root test showed the result for residuals of Hong Kong against Japan at first difference level, the lowest AIC value is -4.335 and its corresponding t-adf value is -3.579. As the t-adf value is within the 5% critical value. Thus, Xt and Yt are showed to be cointegrated in the unit root test. Further graphical analysis will carry out as follow. In figure 30, the regression for Hong Kong against Japan is showed to be cointegrated at first difference level through the correlogram and the spectral density graph. This graphical analysis do support my previous result of augmented Dickey-Fuller test. In Figure 31, the actual value of the residual at first difference level is plotted. Several degrees of fluctuations are shown around the mean within the plot. Which implies that there is a cointegration. Analysis for Hong Kong and South Korea In Table 8, the results for Hong Kong against South Korea through the OLS estimation are showed. The result of the DW statistics is 0.485. the estimation may contain autocorrelation. Through the interpretation of the CRDW test, there is no cointegration among the two variables within the figure. In Table 9, the unit root test shows the result of the residual that Hong Kong against South Korea. The lowest AIC value is -4.386 and its corresponding t-adf value is -2.345. I cannot reject the null hypothesis and accept the alternative as the value is within the 5% critical value. Thus, no cointegration is shown within the estimation. The R-square of the regression is 0.712697. As I mentioned in previous part, if a regression contain a R-square that close or equals to 1, it implies the regression itself may have a higher predictability. In this analysis, the R-square is closer to 1, Therefore, the regression is believed to be consistent. The coefficient of log variable of HK CPI (ÃÆ' Ã… ½Ãƒâ€šÃ‚ ²1) and log variable of South Korea CPI (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2) is 0.386482 and -0.680975 respectively. In this time, the signs of the coefficients matched my expectation as the domestic economy shows the positive sign and the foreign economy shows the negative sign. A weak form of PPP is appears as ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã‚ °Ãƒâ€šÃ‚  -ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã‚ °Ãƒâ€šÃ‚  1. In Figure 32, the correlogram and the spectral density graph shows the analysis of the the residual from cointegration analysis of Hong Kong against South Korea. My previous result for ADF test is being supported by the correlogram, It shows that the exchange rate and consumer price index is not cointegrated. Nonetheless, according to the analysis of the spectral density graphical, characteristic of non-stationary are shown, In Figure 33, the actual value for the residual of Hong Kong against South Korea is plotted. As several degrees of fluctuations were shown around th e mean which implies that there is cointegration within the data. As the graphical analysis contradict the the OLS estimation at level terms I(0), thus, further analysis in first difference level is needed to carry out. OLS estimation at the first differences I (1). Table 10 shows the OLS estimation of Hong Kong and South Korea at I(1). The result of Durbin-Watson statistics is 1.51 which suggests that autocorrelation may exists within the regression. In Table 11, The unit root test showed the result for the residual of Hong Kong against South Korea at first difference level. The least AIC-value is -4.267 and its corresponding t-adf value is -3.718. It is within the5% critical value. Therefore, the exchange rate and the consumer price index for Hong Kong and South Korea may exist cointegration. In figure 34, the analysis of correlogram and the spectral density graph shows that there are signs of cointegration for the residual for Hong Kong against South Korea at first difference level. From Figure 35, the actual value of the residuals is plotted. The regression itself may contain cointegration as there is some degree of fluctuations around the mean. I believe that the residual at I(0) is affected by the Asian Financial crisis happened in 1997, as one outlier is showed in the actual value plot. According to the analysis we did in table 6, the form of PPP between Hong Kong against Japan is showed to be weak. The constant (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±) is 0.0342385, the slope coefficient (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1) is 0.377666 and (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2) is -0.640497. (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1) is not near to 1 and (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2) does not reach to -1. As a result, in a situation that the weak form of PPP exists, given a unchanged HK CPI and a increasing CPI of Japan. The exchange rate of Hong Kong dollar against Japanese Yen will increase. The currency of Hong Kong will stronger than the currency of Japan. For instance, Hong Kong has an inflation, the purchasing power for the Hong Kong currency will reduce. Meanwhile, with the same amount of HKD, fewer amounts of goods and services can be consumed in Japan. The exchange rate of HKD/JPY must increase to maintain the purchasing power of Hong Kong Dollar in Japan. For the other test we did in table 10, the constant (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±) is 0.0205733, the slope coefficient (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1) is 0.452422 and (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2) is -1.08451. (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1) is far away from 1 but (ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2) is much closer to -1. Due to the ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1 ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã‚ °Ãƒâ€šÃ‚   -ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2 ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã‚ °Ãƒâ€šÃ‚   1, thus the obtained performance for the PPP between Hong Kong and South Korea is still a weak form. Frenkel  [3]  (1981) states that two countries are geographically close together, their PPP should also be relatively close. It is due to the low barrier of trade. According to the econometric modelling, the coefficients of the OLS estimation showed that my analysis for the PPP of Hong Kong against Japan and Hong Kong against South Korea is not a good indicator for predicting the long run exchange rate. Even though the exchange rate and consumer price index did exist cointegration relationship, however both the value of ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±, ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1 and ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2 is unsuccessful to match strong and the weaker form of PPP. Referring to the PPP in weak form, in the case for Hong Kong against Japan and Hong Kong against South Korea, both value of ÃÆ'Ã… ½Ãƒâ€šÃ‚ ± was close to 0. Nevertheless, ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1 for both regressions were not near to +1 and the R-squares of both analyses were comparatively low. That may be caused by some sort of error within the economic modelling. Through the actual value plot, we may discover that the Asian Financial crisis which happened in 1997 had played a major role in creating outliers within my residuals. This may explain the poor performance of my PPP analysis. Also, as the exports markets for Hong Kong, Japan and South Korea are likely to be the same, for instance, the mainland China and the USA. In recent past, the service sector within the GDP of Hong Kong, Japan and South Korea has accounts for 88%, 73.1% and 67.7% respectively  [4]  . The key components of service sector are included shipping, wholesale retail trade and financial services. When you compare the relationship between the main industries in Hong Kong against Japan and Hong Kong against South Korea, it is no doubt to say that they are electronics, chemicals and textiles. Nevertheless, when constructing the price indices, different countries are always using various of goods and services. It means that the fairness of price index of two economies may be low, as they constructed by several of goods and services. Thus, a weak form of PPP is obtained in these three economy. Error Correction Model The error-correction model is based on the theorem of Granger representation. The model itself shows the crucial connection between cointegration and the error correction model. The reason is that when there is connection between the exchange rate and consumer price index in long run, a mechanism should be there to coordinate the exchange rate and the consumer price index back to their equilibrium level. Testable hypothesis: ÃÆ'Ã… ½Ãƒ ¢Ã¢â€š ¬Ã‚ St = a + but-1 + c1ÃÆ'Ã… ½Ãƒ ¢Ã¢â€š ¬Ã‚ pt-1+ c2ÃÆ'Ã… ½Ãƒ ¢Ã¢â€š ¬Ã‚ p*t-1 + ÃÆ'Ã… ½Ãƒâ€šÃ‚ µt Where: ut = st ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±- ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1Pt +ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2Pt* As series st, pt and pt* are usually non-stationary, so PPP implies cointegration. In Tables 12 and13, the trial and error process are showed. The parsimonious model for Hong Kong against Japan can be found by eliminating the larger t-probs. According to table 13, the parsimonious model from ADL modelling is being achieved. In theory, similar resul t would be given out even the methods of deriving the error correction model are different. Therefore, Engle and Granger two-step procedure is introduced to derive the parsimonious model. In order to test whether the error correction model are hold, OLS estimation is applied again . Through the OLS estimation, all the variables I tested are in log form and first difference level. Secondly, as the above estimation of OLS, I let the log variable of Hong Kong dollars against Japanese Yen be the St value. And in order to make my analysis be more accurate, the lag length for both log HK CPI and log Japan CPI in first difference level are changed to be 4. According to Table 14, we can see that the t-probs of numerous variables are greater than 0.05. As DLHKCPI_4 is 0.693. Therefore, those larger t-prob variables are needed to be eliminated and re-run the OLS estimation. In Table 15, the coefficient value of DLHK CPI_1 is -1.96949 and the t-prob is 0.006, and the DLJapan CPI_1 with t he coefficient value is 8.76664 and the t-prob is 0.002. The test summary in Table 16 shows all pass result for AR1-2 test, ARCH 1-1 test, normality test and the RESET test as no asterisk (*) is present. The value of Durbin-Watson test is 1.44 with 25 observations and 4 parameters. For the 5% significant leve, the lower bounds dL=1.04 and upper bounds dU =1.77. The value is within the lower and upper bounds. Therefore, the exchange rate and the consumer price index are shown to contain serial correlation. Let St be the log value of exchange rate in first difference level and ut-1be the lag value of residual. For the C1 should be DLHK CPI_1 and C2 be DLJapan CPI_2. Also, in the St (exchange rate) in one period corrected in next period, the proportion of the disequilibrium is showed by the value b. Hence, insert all variables within the formula, we may have; ÃÆ' ¢- ³St= 0.0512308+0.464698ut-1-1.96949ÃÆ' ¢- ³pt-1+8.76664ÃÆ' ¢- ³p*t-1+ÃÆ'Ã… ½Ãƒâ€š  µt According to the result of the equation above, positive coefficients for the CPI have shown in the short-run, and for the b value is 0.464698, inconsistency is showed between the actual value relationships in long run. Base on all passed tests result, we may conclude that the PPP tracks well within Hong Kong against Japan. In Table 17 and 18, the ADL Modelling results of the trial and error process ofHong Kong against South Korea are showed. Again repeating the same process for Hong Kong against Japan, the parsimonious model for Hong Kong against South Korea is derived. Through the result, it shows that further derivation of the model can be made in short run. Nevertheless, in order to check whether my ADL modelling is valid, Engle and Granger two step procedure is introduced for analysis. In Table 19, the regression result for the OLS model of the DLHKD/KRW in first difference level is showed. By taking the same step I used in the above analysis. We eliminate larger t-prob value and run the OLS estimation again. Therefore, DLHK CPI 2,3 and 4, also the DLSKR CPI 2,3and 4are being delected. From Table 20, The DW value is 1.19 with 25 observation and 4 parameters. From the Durbin-Watson significance table, we may find that the dL = 1.04 and the dU = 1.77. The DW value is within the lower and upper bounds. As a result, I believe that the data itself may contain serial correlation. Finally, the result for the Table 21 is being analysis. It shows that AR 1-2 test, the normality test and RESET test are all passed excepted the ARCH 1-1 test. Moreover, when all coefficients are inserted into the formula, we got; ÃÆ' ¢- ³St = -0.0425611+ 0.589508 ut-1-1.31079 ÃÆ' ¢- ³pt-1+ 1.81169ÃÆ' ¢- ³p*t-1+ÃÆ'Ã… ½Ãƒâ€šÃ‚ µt The results shows that there is a negative coefficients for the CPI in short- run, and the b-value is 1.81169,it shows inconsistency between the actual value relationships in long run. Conclusion Base on the econometric testing above, even though my data showed characteristics of nonstationarity and cointegrated. In long run, it is obvious that there is no relationship between Hong Kong and South Korea in purchasing power parity, according to my error correction model analysis; and also Hong Kong and South Korea. Therefore I need to examine the quality of the data and also some of the assumption. The consumer price index and the exchange rate of Hong Kong and Japan are showed to be cointegrated in the section of cointegration analysis, nevertheless, the error correction model had confirmed that the two countries do not contain long run relationship. As a result, the data itself cannot be used for forecasting and analysis. For Hong Kong against Japan, there may be flaws within my data due to the negative 1 coefficient. However, all variables in my project showed that the second differencing in the stationary analysis is the signs of stationary; which implies my regression could not assume as a spurious regression. Therefore, there could be a high possibility of the existence of other reasons which would affect the coefficients. Base on the same test I worked for Hong Kong against Japan, the exchange rate and consumer price index of Hong Kong and South Korea are showed to be cointegrated in the section of cointegration analysis, nevertheless, the error correction model also proved that the two countries do not contain long run relationship. From the first difference of actual value plot of residual, there were one major structural break within the data; we may consider that as the consequence of Asian Financial crisis in 1997. For these events, I believe that is the main reason for my failure of Error Correction Model. In order to improve the quality of the analysis, there is a need to increase the series length and identify the flaws of the data. Nevertheless, more structural breaks may result due to the extension of time period. Therefore, we should adding dummy variables within the analysis in an attempt to smooth out the outliers. Hence, to construct a more efficient research.