The Latvian Road to the Euro

The article presents the situation in Latvia ahead of the country＇s adoption of the euro by offering an analysis of the extent to which the country is prepared for the move and of general economic difficulties as well as indicating possible threats to its future development. The article talks about difficulties caused by the great unemployment connected with the specific economy of the country, political problems of the post-socialistic multinational country and steps done towards the fulfilling of all the convergence criteria. Its aim is to present the moments around the change of the currency which is done by the material＇s analysis because there are not enough statistical data for the mathematical analysis. It can be concluded that the adoption of the euro will probably be beneficial in the long run for Latvia＇s economy. The conclusions may be done by comparison with the situation of Estonia and its foreign trade with Poland which is shown in the article because there are a lot of similarities between the two Baltic countries.     

Does scoring a subpopulation make a difference

Scorecards used by consumer credit providers to assess the probability that an applicant will default are usually built for the population of potential applicants as a whole. This paper investigates whether it is permissible and worth-while to build a separate scorecard for each subpopulation of applicants. We review the legal requirements to find that it is permissible to use separate scorecards for many, but not all, personal characteristics. Second, using data supplied by a credit card organization separate scorecards were built for several subpopulations for each of twelve personal characteristics. The predicted performance of each was compared with that gained form estimating a scorecard for the full population using three methods for setting the cut-off scores in an `independent' way. These methods differ in the degree to which the cut-off scores are independent of information about other subpopulation, in the level of discrimination achieved between likely good payers and defaulters and in the degree to which each method is robust to new data. We conclude, first, that creating scorecards using subpopulations does not necessarily give better discrimination between likely good payers and defaulters. Second, none of the three methods examined to set the cut-off scores dominates the others using the three desirable properties described; trade-offs are required. Finally, subpopulation scorecards lead to the rejection of fewer applicants than scorecards built on full populations.     

Fuzzy Bargaining Games: Conditions of Agreement,Satisfaction, and Equilibrium

Game theory in its several variants is widely recognized as a contribution to social and economic modeling. One relevant development of classical game theory, Generalized Game Theory (GGT), entails its extension and generalization through the formulation of the mathematical theory of rules and rule complexes. Social theory concepts such as norm, value, belief, role, social relationship, and institution as well as game can be defined in a uniform way in terms of rules and rule complexes. Among the applications, one major initiative has been the conceptualization of fuzzy games and equilibria. In this paper a GGT model of 2-person fuzzy bargaining games is outlined. Two key concepts are applied: (1) players’ value (or “utility”) structures consisting of ideal points or expectation levels, on the one hand, and limits of acceptance, on the other; (2) fuzzy judgment functions in which players deal with imprecise information and use approximate reasoning in making decisions and negotiating agreements. Such fuzzy judgment functions can take into account economic, socio-psychological, and cultural and institutional aspects of the bargaining context, which affect the bargaining process in specifiable ways. Several significant results are obtained from the application of this model: the opportunities (or not) for agreement, the participants’ satisfaction levels with an agreement, and the question whether or not the agreed “price” is an equilibrium price.     

Creating a bridge between university and industry in small European countries: the role of the Industrial Liaison Office

The frequent and intermittent need for new scientific knowledge has resulted in an increasing focus on links between industry and academic institutions. This has been particularly pronounced in the flows of knowledge between the two partners, which may lead to considerable diffusion of scientific and technical knowledge, particularly into the small firm sector. This development could be of particular benefit to smaller peripheral economies, which have demonstrated low levels of indigenous industrial technological development. As a result, universities could become increasingly important for local economic development in smaller countries on the periphery of Europe. However, a greater understanding is required of the pro-active role that the university itself can play in developing strong linkages with industry, particularly through mechanisms such as the Industrial Liaison Office (ILO). In particular, there needs to be an examination of the strategies and policies that are undertaken to increase the process of technology transfer from academia into local indigenous business within smaller countries. This paper will therefore examine the role that universities play in the regional economic development in two contrasting small countries of Europe, namely Sweden and Ireland. Drawing on interviews with key individuals in the processes of technology transfer between academia and industry (including ILOs), as well as secondary data, it will examine the general role and function of the industrial liaison office and how this has changed. It will also discuss the involvement of the university in different types of industrial links, the main opportunities and barriers to the development of links between university and industry, the benefits to the university from industrial links, and the perception of industry’s assessment of the relationship with universities. The research will provide valuable insight into the role of universities in developing innovation and entrepreneurship within the smaller and peripheral countries of Europe and will determine whether these universities are undertaking a pro-active role in encouraging the growth of innovative indigenous industry. This may have significant policy implications, especially with regard to the development of specific regional programmes to encourage academic-based entrepreneurship.     

Economic policy with bounded controls

When investigating optimal policies for macroeconomic models, it is common practice to modify the objective function so that the resulting optimal control trajectories become acceptable from a practical point of view. In this paper we argue that the sole purpose of the objective function should be to express the preference of the decision makers, and that explicit bounds on the controls should be used to ensure that the optimal controls will be practical. Using a piece-wise quadratic objective function involving only the unemployment and inflation rates, which are state (endogenous) variables, we first develop a discrete minimum principle, giving necessary and sufficient optimality conditions. Then we perform various bounded control experiments with the 35-equation quarterly CLEAR model of the Canadian economy, which is very briefly described. The empirical results which were obtained using a version of the GRG algorithm are discussed in view of the conclusions that might be drawn for a real-world practical policy analysis.     

Food choice models and their relation with food preferences and eating frequency in the Polish population: POFPRES study

A sample of 9339 subjects aged 13–75, living in the six macro-regions of Poland rated the preferences of 140 various food products, eating frequency and factors influencing food choice. Four groups of consumers were found: “consumers susceptible to advertising and seeking novel healthy products” (33.2% of the sample), “consumers not taking care of their health” (25.4%), “consumers not susceptible to advertising and taking care of their health” (32.5%), and “consumers insensitive to sensory attributes of fruit and vegetables” (9.0%). Among factors influencing the food choice, sensory and functional factors were significant, and health and price – moderate. Advertising was generally denied as an important factor in food choice. The food choice motives were highly dependent on age and gender, and to a lower extent – on region of residence, size of place of residence, economic condition and education level. Women/girls more often showed pro-health behaviours in food choice, choice motives, preferences and food intake.     

Taxonomy methods in credit risk evaluation

In their bid for integration with the European Union, the countries of Central and Eastern Europe are faced with the need to introduce numerous significant improvements to their economic systems. A highly important role in this process is to make changes in the existing banking systems. The credit risk evaluation method presented here, using taxonomic measures to plot so-called credit risk maps, may be used to develop sound principles of credit policies. It is a proposition that could solve one of the many problems arising in the course of adaptation of banking systems in Central and Eastern Europe to conditions of market economy.     

Reviews

Who gets access to training? Machin, S. and Wilkinson, D. 1995: EMPLOYEE TRAINING: UNEQUAL ACCESS AND ECONOMIC PERFORMANCE. London: Institute for Public Policy Research, £3.95 paper.

Spatial planning. Williams, R.H. 1996: EUROPEAN UNION SPATIAL POLICY AND PLANNING. London: Paul Chapman, £16.95 paper.

Small firm growth. Barkham, R., Gudgin, G., Hart, M. and Hanvey, E. 1996:. THE DETERMINANTS OF SMALL FIRM GROWTH: AN INTER-REGIONAL STUDY IN THE UK 1986-90. London: Jessica Kingsley Publishers, £19.95 paper.

Krakow — transition to capitalism. Hardy, J. and Rainnie, A. 1996:. RESTRUCTURING KRAKOW: DESPERATELY SEEKING CAPITALISM. Mansel, £50.00 cased.