1.Economic models and investment

Economic model is a theoretical construct that represents economic processes by a set of logical relationships between them. There are some most famous economical models: the American model has such good points as flexible labour and product markets, low taxes. Also this model has bad points such as wide income inequalities, low investment and very low savings rate. The Japanese model has also best and worst features. The best ones are life-time employment, public services of high quality, close relations between banks and other firms. Excellent education and close relations between firms and banks, assist high investment are good points of the German social-market model. Bad points are high taxes, product market restrictions which have led to persistently high unemployment. And the last model is New Zealand one, which is one of the most free-market in the world, has the lowest taxes and widespread privatization. But there is bad feature in this model such as big increase of inequality. Investment is expenditure on the purchase of financial securities such as stocks and shares. There are two types of investment: portfolio and real or physical. Portfolio investment is undertaken by persons, firms and financial institutions in the expectation of earning a return in the form of interest or dividends. Physical or real investment is capital expenditure on the purchase of physical assets such as plant, machinery and equipment.

2. The world bank and the international monetary fund

World Bank or International Bank for Reconstruction and Development is a multinational institution set up in 1947 to provide economic aid to member countries - mainly developing countries - to strengthen their economics. The Bank has supported a wide range of long-term investments including infrastructure projects such as roads, telecommunications and electricity supply; agriculture and industrial projects including the establishment of new industries, as well as social, training and educational programmes. The Bank's funds come largely from the developed countries, but it also raises money on international capital markets. The Bank operates according to 'business principles' lending at commercial rates of interest only to those governments it feels are capable of servicing and repaying their debts.

IMF – is a multinational institution set up in 1947 to supervise the operation of a new international monetary regime – the exchange rate system. The main goal of the Fund was to save cooperation and currency arrangements between member countries with the aim of promoting international trade and balance-of-payment equilibrium. The Fund is active in two main areas: 1) Exchange rates – In 1971 countries established fixed exchange-rates for their currencies. 2) International liquidity – fund resources which consist of a pool of currencies and international reserve assets it is the quota.

 

 

3. The World Trade Organization

General Agreement оп Tariffs and Trade (GATT) is inteгnational огgапizаtion established in 1947 to pгomote the expansion of international trade through the removal of tariffs and other restrictions on cross-frontier trade. GATT operates in two principal ways. 1. By arranging for countries to receive foreign tariff reductions in return for tariff cuts of their own. 2. By requiring that a country should apply its lowest tariff for any particular product  for all of its suppliers.. In 1995 GATT was replaced by the World Trade Organization (WTO). The WTO is governed by a Ministerial Conference, which meets every two years; a General Council, which implements the conference's policy decisions. The WTO's headquarters are in Geneva, Switzerland. Another priority of the WTO is the assistance of developing, least-developed and low-income countries in transition to adjust to WTO rules and disciplines through technical cooperation and training. The WTO is also a center of economic research and analysis. Finally, the WTO cooperates closely with the IMF and the World Bank.