Introduction to the Reserve Ratio

Introduction to the Reserve Ratio The reserve ratio is the fraction of total deposits that a bank keeps on hand as reserves (i.e. cash in the vault). Technically, the reserve ratio can also take the form of a required reserve ratio, or the fraction of deposits that a bank is required to keep on hand as reserves, or an excess reserve ratio, the fraction of total deposits that a bank chooses to keep as reserves above and beyond what it is required to hold. Now that weve explored the conceptual definition, lets look at a question related to the reserve ratio. Suppose the required reserve ratio is 0.2. If an extra $20 billion in reserves is injected into the banking system through an open market purchase of bonds, by how much can demand deposits increase? Would your answer be different if the required reserve ratio was 0.1? First, well examine what the required reserve ratio is. What Is the Reserve Ratio? The reserve ratio is the percentage of depositors bank balances that the banks have on hand. So if a bank has $10 million in deposits, and $1.5 million of those are currently in the bank, then the bank has a reserve ratio of 15%. In most countries, banks are required to keep a minimum percentage of deposits on hand, known as the required reserve ratio.This required reserve ratio is put in place to ensure that banks do not run out of cash on hand to meet the demand for withdrawals. What do the banks do with the money they dont keep on hand? They loan it out to other customers! Knowing this, we can figure out what happens when the money supply increases. When the Federal Reserve buys bonds on the open market, it buys those bonds from investors, increasing the amount of cash those investors hold. They can now do one of two things with the money: Put it in the bank.Use it to make a purchase (such as a consumer good, or a financial investment like a stock or bond) Its possible they could decide to put the money under their mattress or burn it, but generally, the money will either be spent or put into the bank. If every investor who sold a bond put her money in the bank, bank balances would initially increase by $20 billion dollars. Its likely that some of them will spend the money. When they spend the money, theyre essentially transferring the money to someone else. That someone else will now either put the money in the bank or spend it. Eventually, all of that 20 billion dollars will be put into the bank. So bank balances rise by $20 billion. If the reserve ratio is 20%, then the banks are required to keep $4 billion on hand. The other $16 billion they can loan out. What happens to that $16 billion the banks make in loans? Well, it is either put back into banks, or it is spent. But as before, eventually, the money has to find its way back to a bank. So bank balances rise by an additional $16 billion. Since the reserve ratio is 20%, the bank must hold onto $3.2 billion (20% of $16 billion). That leaves $12.8 billion available to be loaned out. Note that the $12.8 billion is 80% of $16 billion, and $16 billion is 80% of $20 billion. In the first period of the cycle, the bank could loan out 80% of $20 billion, in the second period of the cycle, the bank could loan out 80% of 80% of $20 billion, and so on. Thus the amount of money the bank can loan out in some period ​n of the cycle is given by: $20 billion * (80%)n where n represents what period we are in. To think of the problem more generally, we need to define a few variables: Variables Let A be the amount of money injected into the system (in our case, $20 billion dollars)Let r be the required reserve ratio (in our case 20%).Let T be the total amount the bank loans outAs above, n will represent the period we are in. So the amount the bank can lend out in any period is given by: A*(1-r)n This implies that the total amount the bank loans out is: T A*(1-r)1 A*(1-r)2 A*(1-r)3 ... for every period to infinity. Obviously, we cannot directly calculate the amount the bank loans out each period and sum them all together, as there are an infinite number of terms. However, from mathematics we know the following relationship holds for an infinite series: x1 x2 x3 x4 ... x / (1-x) Notice that in our equation each term is multiplied by A. If we pull that out as a common factor we have: T A[(1-r)1 (1-r)2 (1-r)3 ...] Notice that the terms in the square brackets are identical to our infinite series of x terms, with (1-r) replacing x. If we replace x with (1-r), then the series equals (1-r)/(1 - (1 - r)), which simplifies to 1/r - 1. So the total amount the bank loans out is: T A*(1/r - 1) So if A 20 billion and r 20%, then the total amount the bank loans out is: T $20 billion * (1/0.2 - 1) $80 billion. Recall that all the money that is loaned out is eventually put back into the bank. If we want to know how much total deposits go up, we also need to include the original $20 billion that was deposited in the bank. So the total increase is $100 billion dollars. We can represent the total increase in deposits (D) by the formula: D A T But since T A*(1/r - 1), we have after substitution: D A A*(1/r - 1) A*(1/r). So after all this complexity, we are left with the simple formula D A*(1/r). If our required reserve ratio were instead 0.1, total deposits would go up by $200 billion (D $20b * (1/0.1). With the simple formula D A*(1/r) we can quickly and easily determine what effect an open-market sale of bonds will have on the money supply.

When She Finally Woke Up †Personal Narrative

When She Finally Woke Up – Personal Narrative Free Online Research Papers It had been three years since my mom had been in a committed relationship and she seemed to be enjoying her life of freedom. She loved to dance, so as many nights as possible, she would hit the dance clubs with her friends and dance the night away. It certainly kept her slim and trim and at 5’10† she definitely made heads turn. Mom always made sure she dressed very stylish and her makeup and hair had to be perfect. She dated, but no one really appealed to her enough to take her away from her fancy-free single-parent life. Mom worked for a large company and when the opportunity came her way, she put in for a job change that would bring her more money. Shortly after moving to her new job, she invited a few of her coworkers to the house for a â€Å"get to know each other† party. Bill was a guy who stood out, but not in a positive way. Mom shared with me that she stayed as far away from him as possible and that suited her just fine. He was too loud, too silly, and homely. Bill had a splotchy red complexion, and hair that was glued together with hairspray. If he got caught in a 50 mile-an-hour wind storm, his hair would all move at as a single unit. After avoiding Bill for several weeks, one day my mom overheard him talking to someone who appeared to be having a problem. Mom said that Bill was so understanding and compassionate, that it really took her back for a minute. Was this that guy who didn’t have a serious bone in his body? Obviously there was another side to this person that she had not expected. As you got to know Bill you realized he wasn’t just the clown that kept everything light and fun. He was that guy who always had a shoulder to cry on and would drop everything to help someone in need. It seems almost unheard of these days when someone is willing to forget what they are doing or where they are going, to just give you their time freely. This was the first thing that seemed to draw her to him and it was obvious that her feelings for him were growing stronger and stronger. Mom said she could talk to Bill about anything and sometimes their discussions went on for hours. Mom told me he was an avid reader, so he would tell her things she had never heard of before. He would tell her about science and what things we might see happen in the future, explain to her how the battles began in the Middle East, and he was well versed on just about any subject you can think of. Maybe her admiration of him went too deep. I began to feel that Mom had such an elevated opinion of Bill’s wisdom, it overpowered her own self-confidence. When Mom and Bill did anything, it was going to happen how Bill wanted it to or it wasn’t going to happen at all. If he got up early, she had to get up too. If they went somewhere together, they left when Bill was ready. Her friends and family, including my sister and me, began to see less and less of her. If they spent time with anyone, it was usually Bill’s circle of friends or family. I felt like I had lost my Mom. She had always been so strong and independent; it was hard for me to see her this way. How could she have let this person have such total control of her for five long years, completely unchecked? I remember the day mom came home from her sociology class and told me what her instructor had said. He was talking to the class about how he is an â€Å"early bird† and his wife is a â€Å"night owl†. Mom jumped on this one and asked him how he handled that. He said he would get up early and read his paper, have a cup of coffee and would let his wife sleep in. If someone had slapped her right in the face, it couldn’t have woken her up any more than that instructor’s words. She realized there were caring people out there who actually let you be yourself? Of course there were! She just needed to remember what her life was like before Bill. Better yet, before she lost herself. Of course, the relationship disintegrated when she began to demand things that she wanted, but at least Mom was free to be herself again. If I can’t have a love relationship that allows both of us to be who we are, I can live without it and I know Mom can too! Research Papers on When She Finally Woke Up - Personal NarrativeNever Been Kicked Out of a Place This NiceThe Masque of the Red Death Room meanings19 Century Society: A Deeply Divided EraThe Spring and AutumnComparison: Letter from Birmingham and CritoCapital PunishmentHip-Hop is ArtPersonal Experience with Teen PregnancyAnalysis Of A Cosmetics AdvertisementMarketing of Lifeboy Soap A Unilever Product

Anything about europe Essay Example | Topics and Well Written Essays - 2500 words

Anything about europe - Essay Example Parliament itself was controlled by big landlords. The man in the street still did not count. If this was true of England, the same was the case in other European countries like Austria-Hungry, Prussia, Russia, France, Spain, Poland etc. In most of the European countries, the rulers were depots although during the 18th century they were called enlightened despots. The people had no hand in the administration of the country. They did not enjoy any personal liberty and everything depended upon the whims of the rulers. Serfdom prevailed almost everywhere in Europe. European rulers at that time were dishonest and unprincipled. International morality reached its lowest ebb during the 18th century. A man like Frederic, the Great, did not hesitate to annex Silesia in spite of his promises to Charles VI, the father of Maria Theresa. Russia, Prussia, and Austria conspired among themselves to put an end to the very existence of Poland. There was a general craze for territorial expansion at the expense of the weaker neighbors. "No consideration was paid to race limits or national boundaries," In the words of Professor Holland Rose, " That respect of dynastic rights and treaty obligations which generally held sway when Christendom was more than a name, now gave place to a state policy which avowedly aimed at little else but gain of territory or markets." Prof Hazen says, "The old regime in Europe was disloyal to the very principles of which it is rested" and those principles were respect for the established order and regard for regality and engagements (Mahajan 1) All over Europe there were privileged classes which were completely or partially exempted from taxation and the burden of taxation fell on the unprivileged classes. The rich paid less to the state and the main burden fell on the poor. European society was organized on a feudal basis and the landlords acted like petty sovereigns in the localities. The serfs were attached to the land and most of the proceeds from land went into the pockets of the landlords. The conditions of the serfs were miserable. To quote, "the great substructure of European society was an unhappy, un free, unprotected, undeveloped mass of human beings, to whom an opportunity for growth and improvement was closed on every side." While a few enjoyed privileges, the others suffered. Inequality in every field weakened the very foundations of the social systems. There was hardly any awakening among the masses of Europe and thus the system continued. (Mahajan 21) As regards the religion condition of Europe, western, western and central Europe were roughly divide between a Protestant North and a Roman Catholic south. In the centre people of Switzerland and Savoy were Protestants. The people of Ireland and Poland were Catholics. In Eastern Europe, the orthodox of Greek Church held sway over Russia and the Balkans. The Jews were found all over Europe. In some places, they were tolerated, while at others persecuted. Europe was not free from religious strife but religious toleration was making headway. It was felt that persons of different faiths could be the loyal subjects of the state. The growth of humanitarianism also played its part. The spread of the spirit of scientific inquiry made for tolerance. There was the decline of dogmatic religion. Causes of the French revolution The French revolutio

INTERNATIONAL TRADE STRATEGY AND TECHNIQUES - FINAL CASE STUDY

INTERNATIONAL TRADE STRATEGY AND TECHNIQUES - FINAL - Case Study Example The new company concentrates on the manufacturing and marketing of polymers at 20,000 tons/year. The total investment for the ventures is 12 million Euros. The sections of financing are 4 million EUR by equity financing, Export credit obtained from COFACE up to 6 million EUR and other debt financing of about 2 million EUR. The favorable and the risk factors which would be faced by owing to its joint venture with Vietchem are elaborated in the report. Question 1 Vietnam Vietnam is a developing economy which is planned with a market well connected to the other parts of the world. The economy of Vietnam has shifted their concentration from centralized planned economy to socialist market economy that employs both indicative and directive planning. After the shift, the economy has rapidly grown. The Vietnamese population has been estimated to be 87 million. This estimation includes 3 million who lives in Hanoi and in Hochiminville; the estimated number has been 9 millions. About 11 millio n of the population are working in the industry or engaged in industry related works. The unemployment rate has been 2.3%. The GDP value amounts to $300 billion with a growth rate of 5.9%. The FDI inflows have amounted to $7.4 billion. The average tariff rate of trade has been 5.7% that includes some of the non-tariff barriers which had limited the gains of trade (The Heritage Foundation, â€Å"Vietnam†). Though there have been serious efforts from the FDI but it has been hindered by the government regulations by imposing various restrictions. With the evolving capital markets of Vietnam, the financial sector has also expanded (â€Å"China struggles with the way forward on reform†). Vietnamese Market Although the Vietnamese market has shown a rapid growth, it is still extremely price sensitive. Thus if the JV has to take place, Synthenia has to face this issue. Vietnamese market is a monopoly market with only a single producer of polymers i.e. Polyviet Company Limited. The company is based in Japan and sells 80% of its end products in the Vietnamese market. The company produces polymers and their main customers are the seekers of textile glues and formulators of buildings. Thus, the JV is looking for a reliable polymer supplier with a very good Research and Development department so that the products are adequately tested (â€Å"Investing in Vietnam – A risk worth taking?†). The favorable and unfavorable factors that Synthenia will probably run into while doing business in Vietnam are elaborated in the next section. Favorable factors for investment in Vietnam For establishing an investment plan in Vietnam the chemical giant group, Synthenia will have many advantages few of which are elaborated below. Synthenia has spread its existence in the Asian market. The Asian agents and the distributors have helped the company to develop their business in Asia. So with its expansion in Vietnam, it will provide a wider Asian market for the comp any. The country had a growth rate of 4.9% in 2009 which has increased to 5.9% in 2012 and has stabilized at that point. Thus

Nut wk7 assignment Essay Example | Topics and Well Written Essays - 1250 words

Nut wk7 assignment - Essay Example However, I took the initiative to put into practice the activities recommended by â€Å"Mypyramidtracker.† The most interesting activity was to carry out various body exercises and then calculate the corresponding energy expenditure from the calculator. I also developed the habit of being nutrition conscious and took control of my eating habits. The first time I did a food nutrition evaluation, I found that my diet consisted excessive energy-giving foods. Most of my diet consisted of deep fried potato chips, crumbled bread, almonds roasted with honey, chocolate milk, and cornflakes among others. The results from the calculator indicated that I was taking approximately 3210 Cal which was the above my daily recommended intake of 2630 Cal. Particularly, I was taking an excess of proteins, saturated fats, and carbohydrates. However, I was meeting the daily-recommended intake for total fiber, which I was able to maintain at 25. Vitamins and mineral elements requirements varied from one vitamin to another. Whereas the diet was exceeding the required daily intake for vitamins A, C, E, and riboflavin, it was falling short of thiamin, potassium, and zinc. After reading and understanding about the various health effects of taking less or more of one nutritional requirement, I decided to change my diet. I primarily reduced the amount of carbohydrate foods I was taking in a day and supplemented the same with vegetables and fruits. The changes were hardly noticeable within the first week but I began to record some changes in the third week. It was challenging at first since some of the substitutes were costly and difficult to choose from the food stores. For instance, I would not know what type of fruits or vegetables would help me meet or at least maintain the daily-recommended nutrient intake for some vitamins. Therefore, I had to exercise patience and do a lot of trial and

Gulliver in Brobdingnag Essay Example for Free

Gulliver in Brobdingnag Essay The setting of the passage to be analyzed here is that of Gullivers voyage to a land of giants. The speakers context here is the basic comic devices of reversal and exaggeration. When the dimensions of things are reversed there is a comic effect. When clowns at the circus ride around in a tiny car the effect is hilarious. In a famous Gary Larsen cartoon a gigantic monster is seen peering into a mans car through the wing mirror which reads: Things reflected in this mirror may appear to be larger than they are. The comic context employed by the speaker in the following passage, then, is that of a man suddenly turned tiny by circumstances beyond his control. There are, of course, classical antecedents for this type of size reversal. Odysseus in the cave of Cyclops would provide the best example. There are, no doubt, many who would argue that this incident in the Odyssey is not meant as humor. May we not at least wonder, however, if some of Homers audiences didnt chuckle when they heard about how the subtle Odysseus outwitted the giant? It will be argued in the following that Swifts intention throughout Part II as a whole is comic irony, and that the passage to be analyzed typifies the situation in which Gulliver finds himself when surrounded by giants. Starting off, a simple exaggeration introduces the passage: The Kings palace is about seven miles round suggesting the colossal size of the castle, the rooms within are two hundred and forty Foot high. Gulliver who is, as we have learned earlier, a proud and dignified man is reduced by his comparatively tiny dimensions to the role of a doll. All of his proud bearing and gentlemanly dignity disappears in a puff of smoke when his Mistress Glumdalclitch holds Gulliver up in her hand to give him a better view of the surroundings. Swifts choice of words at the beginning of this passage also provides an ironic effect. Gulliver who is, in fact, a freak in this society reports that when Glumdalclitch is taken out to see the town, I was always of the party, carried in my Box To be of the party suggests social (and physical) equality, but when Swift follows this dignified phrase with the description in my box the effect is humorous, since Gulliver is revealed as the curiosity and freak that he is by the fact that he travels in a box like a doll. Swifts imagery in this passage allowed allows the reader to see other human-like creature from the perspective of a very tiny person. It also demonstrates to the reader once again that Swift loves to engage in the humor of the disgusting and the impolite. When a group of Brobdingnagian beggars presses up against the carriage to view the strange little creature that is our speaker, Gulliver is able to observes the cancer on the breast of a beggar woman full of holes, in two or three of which I could have easily crept and body lice and their snouts with which they rooted like Swine. There is a misogynist quality to this joke. The breast of a woman is presented as disgusting rather than as an inspiration to art and poetry. The idea of crawling into a cancerous lesion on a womans breast is an ugly parody of what men usually think about when they see the naked female breast which is to adore, kiss, or suck it. This type of humor is based on a simple reversal of the usual emotions inspired by an image. The equivalent would be, for example, to provide an image of the Queen of England sitting on a chamber pot rather than her throne. The imagery in the rest of this passage is also unforgettable, especially the wooden legs of a beggar which were each about twenty Foot high. Immediately following these alarming and disgusting images is another liars trick based on the category of emphasis. This is offered in Gullivers careful description of his Box. Before analyzing this part of the passage in detail a general comment on Swifts project in Gullivers Travels is required. The speaker mentions many times throughout the tale the phenomenon of travelers tails or books of voyages. These were supposedly factual accounts of what travelers from Europe had seen on the other side of the world. They were, of course, full of lies and Swifts project throughout much of the book is to satirize the lying authors of these books. One well known liars trick is to emphasize the details of some fictional object. This is what Gulliver does with the description of his Box. Its origin is carefully described: the Queen ordered a smaller one to be made for me Its design and dimensions are carefully recorded: This traveling Closet was an exact Square with a Window in the Middle of three of the Squares , etc. The important detail of the boxs construction which will eventually allow for Gullivers salvation by sailors is also carefully noted: On the fourth side, which had no windows, two strong staples were fixed , and so on. There is a dual purpose to what we might call the liars emphasis lavished on this passage. The first is to satirize the books of travelers tales so popular in Swifts days in which exact descriptions of fantastic creatures were given to fool the credulous. The second is to prepare the reader for Gullivers eventual escape. This happens in his traveling box which is then conveniently destroyed by the sailors who rescue him so that no substantial evidence of his adventure remains, and the gullible can easily believe the whole story of Gulliver among the Brobdingnags. The comic irony is an effective device in satirizing human folly. The absurdity in the relationship between these two elements is essentially targeted at England (Gulliver), the Wigs, specifically, whereby Swift is attacking his opposition. In the spirit of Swifts famous word play about his good Master Bates, we can rename his fable Gullibles Travels.

Incarceration Rates of Minorities in the US

Incarceration Rates of Minorities in the US With law enforcement poised to eliminate crime and the people who commit it, the building of new jails and prison seem to be the likeliest answer to the problem. Throughout American history, minorities have always been portrayed as dark and evil to name a couple of stereotypes. With the help of television and other means of media the focus has been set to create a mental consciousness to presume every black, Hispanic, and anyone closely related as armed and extremely dangerous. This has cause an unfair disadvantage for people of color, but has left the perception of the white race crystal clean. Just as there are bad people everywhere, there are bad cops, judges, and politicians in every police department, court house, and legislative branch that forge evidence to meet arrest quotas that the system needs to have in place; setup by the elitist to fund their need to have slave labor for their manufacturing companies. Some minorities have been falsely accused and persuaded by police bru tality in order to coerce false confessions, and the judges fall in their place to announce the sentencing. Throughout years of focusing on media events that always place blacks and other minorities in a position of being the bad guy. Today the jail and prison population is primarily made up of blacks. Although there are Hispanics, as well whites, the main overcrowding comes from blacks being locked up on frivolous charges. But there’s a deeper reason behind why this injustice is happening to blacks, and it all stems from the system’s need of the incarceration of minorities. To test the influence of local county politics on minority incarceration rates, data are collected at the county level in most states to create a pooled cross-sectional data set. OLS regression models predicting black, Hispanic, and white incarceration rates in state prison are used in the analysis. Counties ideological orientations and racial and ethnic contextual characteristics significantly impact minority incarceration rates. Greater ideological conservatism within counties is associated with higher rates as a proportion of their population of both black and Hispanic incarceration. Consistent with racial threat theory, results show counties with greater racial and ethnic diversity are more likely to incarcerate blacks and Hispanics. Tests for interaction effects indicate that greater county diversity decreases the punitive effects of ideological conservatism on minority incarceration. Political forces nested within states systematically shape how state government incarceration p ower is distributed across different racial and ethnic groups. (Bridges and Crutchfield, 1988; Greenberg and West, 2001; Western, 2006; Yates, 1997), The punitive paradigm that has characterized U.S. crime policy over the past three decades has led to important concerns about the distribution of one of government’s most intrusive powers; the ability to deprive citizen of their liberty through imprisonment across different racial and ethnic groups. It has been well documented that blacks are six to eight times more likely to be incarcerated relative to whites. (Western, 2006). Hispanics are over three and one-half times more likely to be incarcerated than whites. Blacks and Hispanics, together, account for nearly two-thirds of the state prison population. Disparities such as these within the criminal justice system have long engendered heated debate about principles of equality and civil rights. Imprisonment rates between the states are shown to be a function of a variety of state-level political and legal factors. From this research, there is clear evidence that political forces cause states to incarcerate at widely different rates, with minorities living in a particular state either more or less likely to be imprisoned, depending in part, on the politics within. Yet, while these studies have significantly advanced our understanding of the politics of incarceration, state-level studies often mask the fact that a state’s ‘‘use’’ of incarceration is largely a byproduct of political processes found at the local (county) level of government. When analyzing the politics of incarceration from the bottom up, top-dow n political forces like the partisan control of state-level institutions or state sentencing laws effectively become standardized, suggesting that local politics retains significant leverage over how a state’s imprisonment powers are allocated Given this, however, we know little about the extent to which incarceration rates are systematically tied to local environments and whether local politics systematically shape the imprisonment ratesof racial and ethnic minority groups. Two primary questions motivate this research: Do political forces shaped by the local ideological and racial and ethnic environment affect incarceration rates in ways that are disproportionately detrimental to racial and ethnic minorities? Second, to what extent does the racial and ethnic context interact with localized Ideological orientations to affect minority incarceration rates? Or, put another way, can diversity levels in a given jurisdiction work to strengthen or weaken the propensity of those who might, because of their ideological beliefs, be already more inclined to incarcerate minorities? Conservatives tend to view criminal activity as a matter of personal choice and focus on deterrence and incapacitation based policy responses. Beckett and Western (2001). Conservatives have been more likely to use incapacitation as a means to control a marginalized ‘‘underclass’’ of citizens that threatens the economic and political interests of elites. (Scheingold,1984), In contrast, ideological liberals tend to view crime as a function of structural impediments to success and place more emphasis on crime prevention policies rather than punishment after the fact. Beckett, and Sasson (2004). If ideological conservatives are more inclined to incarcerate, these orientations might also be expected to influence the target of those policies with racial minorities more likely to be targeted relative to whites. (Edsall and Edsall, 1992; Weaver, 2007), Republicans used crime and punishment as an effective tool to realign the political electorate by pursuing law and order policies that linked financially secure fiscal conservatives and middle to lower class conservatives who had little else in common, while blaming street crime and other social ills on a racial (black) underclass, conservative. Republicans made veiled appeals to anti minority hostilities among some lower income conservative whites by enacting punitive crime policies that were implemented in ways that put more blacks in prison, but invoked greater support at the ballot box. Insofar as these political pressures retain their influence on criminal justice policy making at the local level of government, as well as to minorities other  than blacks (i.e., Hispanics), it can be predicted that more conser vative counties will be more likely to incarcerate blacks and Hispanics (as a proportion of their respective population) in state prisons than are more liberal counties. Racial politics shaped by the local racial and ethnic contextual environment are also expected to influence minority incarceration rates. In racial politics literature, significant attention has been paid to social conflict or ‘‘racial threat’’ theory, which offers a ‘‘contextual’’ explanation for minority imprisonment. Dating back to the work of Key (1949), the main idea behind the theory is that when a minority population is small, it represents a relatively minor threat to the interests of the majority. However, as the number of minorities grows, they begin to threaten the economic and political interests of the majority population, increasing hostile attitudes toward minority populations among majority group members. Blalock (1967) argued that a majority groupà ¢â‚¬â„¢s repression of a minority group’s interests was based on two types of perceived threats those motivated by economic competition and those driven by competition over political power. A growing body of research has found evidence of a racial threat effect across a variety of institutional settings. (Hurwitz and Peffley, 1997). If racial hostilities increase in more diverse environments, there are more reasons to predict that these hostilities will spill over to influence criminal justice policy making. ‘‘Old-fashioned’’ white racism often concentrated on a perceived genetic inferiority of blacks to whites. Today, more common white stereotypes involve the perception of blacks as a violent, criminal underclass. These stereotypes, along with the assumption that objective demographic data which show blacks to be disproportionately linked to the U.S. penal system permeates the public’s consciousness to believe that most blacks are violent tha n whites. To a meaningful degree, likely increase the probability that whites associate crime and the criminal justice system with race. In conclusion; this research provides convincing evidence of ‘‘racialized’’ crime policy in the United States. The tendency among some whites to connect race with crime has important implications for state punitiveness and imprisonment of blacks more specifically. Whites who view blacks as violent have been shown to be more supportive of punitive policies like the death penalty and longer prison sentences. Following arguments associated with the racial threat idea, a more racially diverse environment is likely to trigger more negative stereotypes among whites living there, who, as a result, may be more apt to support punitive crime policies, particularly if there is the perception that the target population is black. However, existing tests of the racial threat hypothesis on black incarceration rates have brought mixed results. In so me state-level studies, once black arrest rates and other socioeconomic conditions are controlled, the racial threat hypothesis provides little predictive power (Bridges and Crutchfield, 1988; Yates, 1997). Others have found the proportion of blacks in a state does matter, but in the opposite direction predicted by the racial threat idea black imprisonment rates decreased in states with a greater black population (Yates and Fording, 2005). This mixed set of findings brings the possibility that a more appropriate test of a racial threat effect on imprisonment should be conducted at the local level. Measuring the influence of state racial composition on imprisonment has proven useful because it allows comparisons across jurisdictions; however, these efforts often gloss over the fact that state imprisonment rates are a function of decisions made by county law enforcement officials. If, indeed, incarceration rates are influenced by racial politics, it might be expected that county prose cutors, judges, or public defenders those with authority over prosecuting, sentencing, or defending offenders to/from state prison are most likely to be subject to racial ‘‘effects.’’ Assessing the influence of a racial threat on minority incarceration can also be advanced by considering whether political forces resulting from whites’ exposure to a variety of ethnic and racial minorities, rather than simply their exposure to larger black populations, affects minority imprisonment rates. References Percival, G. L. (2010).Ideology, Diversity, and Imprisonment: Considering the Influence of Local Politics on Racial and Ethnic Minority Incarceration Rates. Social Science Quarterly (Wiley-Blackwell), 91(4), 1063-1082. doi:10.1111/j.1540-6237.2010.00749.x Bridges, George S., and Robert Crutchfield. 1988. ‘‘Law, Social Standing and Racial Disparities cin Imprisonment.’’ Social Forces 66(3):699–724. Western, Bruce. 2006. Punishment and Inequality in America. New York: Russell Sage  Foundation. Beckett, Katherine, and Theodore Sasson. 2004. The Politics of Injustice: Crime and Punishment  in America. Beverly Hills, CA: Sage Publications. Edsall, Thomas B., and Mary D. Edsall. 1992. Chain Reaction: The Impact of Race, Rights,  and Taxes on American Politics. New York: W.W. Nortan Company. Scheingold, Stuart A. 1984. The Politics of Law and Order: Street Crime and Public Policy.  New York: Longman. Blalock, Hubert M. 1967. Toward a Theory of Minority Group Relations. New York: Wiley. Key, V. O. 1949. Southern Politics in State and Nation. New York: Alfred A. Knopf. Hurwitz, Jon, and Mark Peffley. 1997. ‘‘Public Perceptions of Race and Crime: The Role of  Racial Stereotypes.’’ American Journal of Political Science 41(2):375–401. Yates, Jeff. 1997. ‘‘Racial Incarceration Disparity Among the States.’’ Social Science Quarterly  78(4):1001–11. Yates, Jeff, and Richard Fording. 2005. ‘‘Politics and State Punitiveness in Black and White.’’  Journal of Politics 67(4):1099–1121.