In arming this epic discovery of such an output, I was obliged to descend deeper in the world of economics, finance, accounting, commerce, technology and other related or unrelated disciplines such as reinsurance, insurance, retail and investment banking, institutional marketing and others.

From an economics standpoint, Paul Samuelson’s contribution in the domain of understanding how the economic system behave outside equilibrium, and how the economy develops from period to period in a chain of development phases asking ourselves the question of whether or not risk associated with globalisation is one of these phases. Thus, to specify the conditions under which an economic system is stable, in the sense that it tends to return by itself to equilibrium after disturbance, for those assuming that global risk can be seen as a temporary disturbance occurring because of past economic recessions, brought about a new rationale for transnational corporations to go global in order to capture the potential deriving from rapidly growing countries.

Professor Samuelson also showed under what conditions international trade results in an equalisation of the factor rewards between countries engaged in international trade, following up a line of research started by Eli Hecksher and Bertil Ohlin.

An attempt to value effectively the reasons associated to risk rendering take-off impossible for emerging nations and poorer countries made us look at the output-input method and its applications to important economic problems. Professor Wassily Leontief, father of this analysis, has helped understand this important economic innovation, which through an empirical-useful method, highlighted the general interdependence in the production system of a given society, which has been comprehensively explained in “The Structure of American Economy, 1919-1929” edited in 1941.

One of the tasks of Risk Economics is to enquire into what is really happening in a world where only certain things can directly be observed. I therefore by the canal of Simon Kuznets’s Economic Growth of Nations, comprehended that quantitative precision goes along with economic magnitudes which always seem be relevant to an understanding of processes of social change. The Eurocurrency club crisis is all about social change as this paper will try and prove within our subsequent deployment.

I found strong sympathy with Kuznets’s discovery depicting that the quantity of real capital which is needed to produce a certain volume of commodities or goods and services exhibits a clearly falling trend. Thus, in industrialised nations, the need for growth of the physical capital is less than proportionate to the growth of production. On the other hand, technological progress and the rising of the quality of manpower play a very important part, as do also structural changes in industry and commerce. These features have been absorbed as evident in the construction of my model of Global Growth Theory which I hold, until proof to the contrary, as being a major breakthrough in the field of Risk Economics and one of the most original approaches to the concept of global risk.

Another beauty of Kuznets’s achievements is that, within the framework of his theoretical models, special regard is paid to institutional and non-economical factors such as changes in population growth, industrial structure and market forms which show coherence in interpreting the growth phenomenon and cyclical fluctuations.

There is a wide tendency to assume today that the globe in which we live is displaying a homogeneous form of market economy resembling more or less those in the western industrialised countries since the fall of communism. I strongly dispute this.

In looking at risk in a pure Risk Economics setting, one cannot ignore the crucial problem associated to optimum allocation of resources (or the lack of it). In following such an action, I refer to the work of Tjalling C. Koopmans. Koopmans’ Activity Analysis has clarified new ways of interpreting the relationship between inputs and outputs of a production process via the correspondence between efficiency in production and the existence of a system of calculation prices. Moreover, his late work studied the problem of finding criteria for an optimum growth rate for an economy paying a particular attention to factors which, in turn, in a more fundamental sense, determine the value individuals and society place on consumption at different times, such as population growth and technological advances.

Bertin Ohlin’s classical work, Interregional and International Trade, has brought him recognition as founder of the modern theory of international trade. One cannot possibly dismiss him in the achievements of my discoveries. My main field of exploration via his work concerned the understanding of the theory he developed to demonstrate which factors determine the pattern of foreign trade and the international division of labour on the one hand, and on the other, shows what effect foreign trade has on the allocation of resources, price regulations and the distribution of income.

I started to build the theoretical features of Globalising-risk and Globalised risk economies by deriving them from what I conceive as faithful to the equation of an international economy. It is worth noting that Hirsh and Thompson have already facilitated my task by drawing a line of demarcation between the “international economy” and the “global economy”. However, it is also a pity to remark that they failed to go beyond that line.

Ohlin has also demonstrated similarities and differences between interregional (inter-national) [which structurally is reminiscent of the Eurocurrency club’s framework] and international trade, and the connection between international trade and the location of industries. This aspect of his theory has been particularly relevant in helping me isolate with precision differences that may arise in the definition of transnational corporation or multinational corporation from what is aimed to represent a genuine footloose organisation with no border, no identity, no culture, no language beyond the elementary English and capable of locating anywhere in the world. By ricochet, this helped defining Global Risk within the parameters of the Globalisation of economies.

As far as the international macro-theory were concerned James Meade through his well acclaimed “Theory of International Economic Policy” provided the appropriate demonstration on the effects of economic policy on foreign trade, all of which have been grandiosely dismissed or simply ignored by the Eurocurrency club nations. Meade’s macro-theory on economic policy has been pivotal in establishing benchmark magnitudes of macro-level risk pattern and exposure according to specific features observed within various economies.

The importance of both Ohlin’s and Meade’s contributions can certainly be justified by the fact that today no one could argue that problems related to the allocations of resources in Europe, business cycles fuelled by a high frequency of boom and busts, and the distribution of income – no matter the location – are very much international problems that need to be tackled by a concerted course of actions which necessarily appeal to a Global Risk Initiative setting.

In order to investigate the problems of the Eurocurrency club and of the wider European economic space, it has been vital to me to explore with a strict methodology several works performed by various outstanding economists. Of which a special attention is given to the works of Theodore W. Schultz and Sir Arthur Lewis.

The first for his account on the analysis of the importance of human resources for economic and social developments from his studies of the productivity problems in agriculture in the United States and particularly in the less developed countries. His disequilibria approach puts in conflict by widening the gap between, on the one hand, traditional production methods, and on the other hand, the more effective methods now available, which, he said, create conditions necessary for a dynamic development. His critique of the less developed countries industrialisation policies and their neglect of agriculture are unfounded because he failed to appreciate risk patterns and the diffusion of the risk spectra on any attempt to industrialise. Still, these entities rely heavily on agriculture to draw their meagre resources. The area of agreement between Schultz and me can be pointed in his appreciation of human and physical capital. He proved that there has been a considerably higher yield on human capital than on physical capital in the American society, and that this tension has resulted in a much faster expansion of educational investment than on other investments.

Poverty, in its global sense, has been widely explored by Sir Arthur Lewis through his fundamental works – Economic Development with Unlimited Supplies of Labour (1954), Theory of Economic Growth (1955) followed his Wicksell Lectures of 1969 Aspects of Tropical Trade, 1870-1965; and his great book, Growth and Fluctuations, 1890-1913 (1978).

No doubt about his real ability of having tackled with elegance issues which are basic to the causes of poverty among populations of the globe and to the unsatisfactory rate of economic development and growth. His models have been the subject of empirical testing which has confirmed their realistic structure and usefulness. In substance, his first model outlines the dual nature of a developing economy in which an agricultural sector and a modern market oriented sector engage in different and unequal lines of production. The former devotes itself on traditional lines and primarily based self-support which absorb the labour of the greater part of the population, and the latter sector primarily engaged in industrial production from which (it is said) “the driving force in the economy stems and expands with the support of an unlimited supplies of labour by migration from the agricultural sector who accept the low wages corresponding to the living standards and conventions in an underdeveloped agriculture”. The profits in the modern sector create the growing savings which finance the capital formation for expansion. From a risk economics standpoint, this analysis is quite telling in every sense!

The other model relates to the determination of the terms of trade between or developed and developing countries as regard to raw materials and products, on the one hand, and industrial products, on the other. Simply speaking, Lewis outlined his model as two group of countries – rich and poor – each producing two kinds of products one of which they have in common, namely, food. The other two products being “coffee” and “steel” are traded. Under the long-term development of the terms of trade, he shows, under specific conditions, how the terms of trade are determined by the relationship between the work productivity in agriculture in the less developed countries and in the developed economies. The relatively much lower productivity in agriculture in the former compared with the rich countries is the determining factor in the current terms of trade between the two groups.

In definitive, it would be only right for me to add that Schultz and Lewis profound experience of development economic policies and underlying political systems makes their presentations of development problems vivid and somehow sincere. However, time did tell us that the enthusiasm by which the world welcomed their approaches have not yielded the expectations of their policies formulations and recommendations.

The study of the factors which permit production growth and increased welfare has been a central feature in economic research. Through it I tried to apply real world risk realities under Robert M. Solow’s growth model which won him the 1987 Nobel Prize in Economics for his exceptional contributions in this area. In his article “A Contribution to the Theory of Growth” (1956), Solow produced a mathematical model, in the form of a differential equation, describing how increased capital stock generates greater per capita production. The starting point is that society saves a given constant proportion of its incomes. The population and the supply of labour grow at a constant rate and capital intensity (capital per employee) can be regulated. Capital intensity is determined by the prices of production factors. Due to diminishing yields, however, additional capital injections (increasing capital intensity) will make even smaller contributions to production. This means that, in the long run, the economy will approach a condition of identical growth rates for capital, labour and total production and real wage no longer increase. Is this the case of the Eurocurrency club zone as of now?

An increase in the proportion of incomes which is saved cannot, therefore, lead to a permanent increase in the rate of growth. Isn’t that the case of the vast majority of the advanced economies? In contrast, an economy with a higher savings ratio, experiences higher per capita production, and thus higher real income. But in the absence of technological progress, the rate of growth will be the same, irrespective of the savings quotient, and will be purely dependent on an increased supply of labour.

From a Risk Economics’ standpoint, Robert Solow’s findings are interesting in many respects: how increased risk capital stock generates greater per capita risk production? Or it is the other way round? As a result, technology development will be the engine for economic growth in the long run. In Solow’s model, if continuous technological progress could be assumed, growth in real incomes will be exclusively determined by technological progress. In my Global Growth Theory, on a purely risk setting framework, I show how the technological line confined in a Cartesian coordinates determines the use of scarce resources in a globalising economy, taking Solow’s doctrine into account. The breathtaking albeit shocking discovery I have made illustrates that, in fact, technological advances as sketched by Solow’s theory can only progress at exclusively increasing prices due to the inefficient use of resources, and only outside the globalisation processes.

Statistical approaches have seen widely used in this paper. The aim of doing so is to provide solid grounding in the aspects of statistics that are of particular relevance to actuarial and risk-modelling works. In particular, these have been useful in the analysis of data from a practical point of view, the use of probability statements, an understanding of risk random variables and risk distributions, and introduction to the theory of macro-risk and to stochastic processes and the use of data to test hypotheses and models, for example through the pivotal credibility theory.

Actuarial approaches have also dealt with risk premium, risk reserves and risk alterations in helping fine-tuning the calibration engines of Lyscale Riskgrade. I introduced the equation of value where payments are certain. In most actuarial contexts some or all of the cash flows in a contract are uncertain, depending on the death or survival or possibly the state of health) of a life, life standing here for the mean average  life expectancy of the populations of the countries we are investigating. I therefore extended the concept of the equation of value with this uncertainty, by equating expected present values of uncertain cash flows. The expected present values for a contract, usually referred to as the equation of value, is equal to the expected value of the outgo, population-wise.