Technical aid by GAWI

The contribution deals with the origin and development of GAWI (German Aid Company for Developing Countries Ltd.) and its present activities in the field of technical aid of the Federal Republic of Germany.     

U.S. Equity Investment in Emerging Stock Markets

This article examines U.S. equity flows to emerging stock marketsfrom 1978 to 1991 and draws three main conclusions. First, despitethe recent increase in U.S. equity investment in emerging stockmarkets, the U.S. portfolio remains strongly biased toward domesticequities. Second, of the fraction of the U.S. portfolio thatis allocated to foreign equity investment, the share investedin emerging stock markets is roughly proportional to the shareof the emerging stock markets in the global market capitalizationvalue. Third, the volatility of U.S. transactions in emerging-marketequities is higher than in other foreign equities. The normalizedvolatility of U.S. transactions appears to be falling over time,however, and we find no relation between the volume of U.S.transactions in foreign equity and local turnover rates or volatilityof stock returns.     

Demand for education, and its estimation

Since education produces major externalities and has important merit want characteristics, the estimation of a demand schedule is extremely difficult. Demand estimation for higher education is made somewhat easier because of the great importance of the associated costs and the relevant private substitutes, i.e. private colleges and universities. Therefore higher education is a good candidate for the application of the individual (economic) preference approach, which is based on the assumption that individuals are aware of their need for education about as they are aware of their needs for products provided by the open market.

The estimation of demand for primary and secondary education can rely only to a minor extent on the individual (economic) preference approach. The voter's behavior approach analysis is likely to be more directly applicable. Study of the behavior of voters and the behavior of legislators and members of school boards can shed light on the demand for education. Analytic insight can be gained also by the “voting with one's feet”, and the “calculus of consent” methods.

Finally, benefit-cost analysis can be applied in situations where education gives an extremely weak demand signal. In education we often are less interested in overall benefit-cost estimates than in the benefit-cost positions in which different important interest groups find themselves with regard to education. Such analysis requires the identification of significant interest groups, bargaining strategies, and bargaining patterns, as well as of ways in which education decision makers respond to group pressures.     

The double deficit of the USA and disequilibria in the world economy

The disequilibria in the world economy, of which the massive trade and current account deficits of the USA are but one manifestation, have reached dangerous proportions. The following article presents a number of scenarios to show how they may develop in future.     

Equilibrium in economies with incomplete financial markets

This paper analyses an exchange economy in the absence of Arrow-Debreu complete markets. It is assumed that trading takes place in the sequence of spot markets and futures markets for securities payable in units of account. Unlimited short-selling in securities is allowed. A general equilibrium in such an economy is a set of current and future prices (contingent on uncertain events) and a set of individual plans such that all markets are cleared. The existence of such an equilibrium is proved under usual assumptions. This is in contrast to the case of futures markets for contingent futures commodities where an equilibrium may not exist. The optimality of equilibrium allocations is also discussed.     

Europeanizing the labour market: Employee mobility and company recruiting methods

With the completion of the single European market steps are to be made towards eliminating remaining impediments to the free movement of labour between Community countries such as an inadequate flow of information or the non-recognition of educational or training qualifications. How do companies respond to the extension of national labour markets by a European component?     

New forms of foreign investment in developing countries

To a growing extent, since the early 1970s “new forms” of foreign investment have developed which constitute a departure from full ownership of the capital by the foreign investor and the practice of “packaged” management services. What view is to be taken of these new forms of investment from the development policy aspect?