UK SCHOOL HELPS TEACH ECONOMICS TO E. BLOC

UK SCHOOL HELPS TEACH ECONOMICS TO E. BLOC

A top British university is advising several East European governments on how to build macroeconomic models that will enable policy-makers to have a better idea of the effects of alternative economic reform programs.

The London School of Economics and Political Science, better known as the LSE, is engaged in a number of East European advisory and training initiatives. One of the most pressing problems, said Saul Estrin, a lecturer in economics at the LSE, is the complete absence in the East of Western style textbooks on macro- and microeconomics, international trade, labor relations and other subjects that are essential reading for economics students.Graduate and undergraduate courses at most East European universities and colleges are completely inappropriate for the needs of the countries now trying to restructure their economies, Mr. Estrin said.

A number of East German students attended the LSE's summer school last year, and the university is hoping that the British government will pay for many more East Europeans to attend this year.

The LSE also has set up a new Center for Economic Performance, headed by Richard Layard, that will monitor proposed economic reforms in the Eastern bloc. The idea is to try and assess the likely success both of individual enterprises and of macroeconomic policies, Mr. Layard said.

Joint research groups and conferences with East European and Soviet universities are on LSE's agenda, said Stanislaw Gomulka, an economist who advised the Polish government during recent negotiations with the International Monetary Fund.

He warned this week that the costs of restructuring, especially in Poland, may be considerably larger than many experts are expecting and predicted that Poland's external debt could climb from around $40 billion to $60 billion over the next five years.

The problems faced in attempting to modernize Poland's infrastructure - including areas such as telecommunications and banking - are huge, Mr. Gomulka asserted. He does not expect to see any real signs of economic and industrial improvement for another five years at least.

Mr. Gomulka plans to monitor the response of the new businesses being established in the East to the new economic mechanisms being put in place.

LSE experts agree that the absence of management or entrepreneurial skills will be a problem, although price liberalization in Poland already is stimulating an enterprise culture, said Nicholas Barr, a lecturer in economics who just returned from Poland.