The Boston Globe from Boston, Massachusetts • 189

THE BOSTON SUNDAY GLOBE JULY 8, 1990 Economic Principals Free trade: A Europe's quest for monetary harmony Central bank, single currency the goal new generation of economists takes sides AX By William Miller GLOBE CORRESPONDENT ONDON On the same day this month that the two Germanies achieved economic and monetary union to the sound of trumpets, the 12-nation European THERE IS AMONG economists a sort of missing generation, between the giants of the 1960s and the whippersnappers of today. The Samuelsons, Friedmans, Galbraiths, Steins and others who became brand names then are in their 70s or even 80s today. The new generation of bright kids, who look on 51-year-old Martin Feldstein of Harvard as a kind of uncle, are for the most part -f: 4 A Community set out on the same path, but without fanfare. While the supremacy of the West German Deutsche mark over the abandoned East German Ostmark caught the public imagination, there were no incidents of high drama symbolic or actual on the wider European stage: No ceremonies, no public announcements, nothing save the passing of the July 1 date. Last Sunday, in short, was the day the European Community had set to begin Stage One of a three-stage journey to economic and monetary union.

EMU, as it is called, will establish a common policy for the 12 EC states and create a central European bank and a single European currency. One of the primary notions behind EMU A -A GLOBE PHOTO MILBERT ORLANDO BROWN Campelia, Fiorentino, Jackson: "We're all kind of cheap." is that concerted ac-j tion by the EC coun-: tries will harmonize Stage One is a step toward a common policy fori the 12 EC states Betting on innovation their inflation rates i and enhance the suc-j cess of the Single Market the frontier-less and trade-barrier free European Community that proponents envision after 1992. in tneir aus. In between are many distinguished economists: Joseph Stiglitz, Mancur Olson, Amartya Sen, Gary Becker, George Ackerlof, Elhanan Helpman and Robert Lucas, to name a few. But relatively few of this in-between generation have the kind of involvement with a single issue or a point of view, fought out in the popular press, that makes an icon, much less a household word.

Harry Johnson is one, but he's dead; Jagdish Bhagwati is another, very much alive as is Lester Thurow. Both are partisans on different sides of the single issue that is most likely to divide the economists' house in the 1990s: the question of free trade. Johnson, of course, was a peripatetic Chicagoan the operating arm of George Stigler and Milton Friedman, a close student of the world trading system, a dauntless foe of protectionism. As an unflagging commuter to Europe, he sometimes wrote two papers on a single transatlantic flight When he died in 1977, of a stroke at 53, it was said that he had so many publications in the pipeline that most economists didn't know he was dead for three years. Pragmatic, monetarist, lucid, skeptical, tart-tongued, but above all, free-trade: that was Harry Johnson.

Next week his pupil, Bhagwati, turns up in London to honor him with a lecture "on the current threats to the General Agreement on Tariffs and Trade and free trade generally. There is no economist better known on trade today or better able to defend it than Bhagwati. Surely it's an auspicious time to pop with a defense of what is sometimes derided as the "general agreement to talk and talk." With heads of state and finance ministers By Jane Fitz Simon GLOBE STAFF An Acton company hopes to strike gold by creating a new breed of supercomputer. CTON Three veterans of the computer industry have quietly built a su- nercommitpr t.hpv sav rwirfnrma lilro T7 Wavetracer Inc. at a gfar.ee ithe most powerful machines on the market for a fraction of the price.

Wavetracer Inc. says it is the first startup to offer a massively parallel processing computer for less than $100,000, an accomplishment that appears to put Route 128 firmly on the leader board in the international race in The main compo- nent of Stage One of the Delors Plan named after EC President Jacques Delors, who headed a committee of central bank-j ers last year is that all EC states must 1 join the already existing Exchange Rate I Mechanism of the European Monetary System that stabilizes fluctuations among EC currencies. Without such stabilization it is contended, plans for further economic and monetary union would be derailed. Stage Two is basically a transition period that includes the setting up of a new institution, principally a European System of Central Banks, being called the Eurofed. During the transition, the ultimate deci- i sions on economic and monetary policies would remain with the national authorities; however, it is expected that exchange and inflation rates would draw closer together, i Under Stage Three, the Eurofed would finally take over from the national central banks, establish all EC monetary policy I and issue a single European currency.

MONETARY HARMONY, Page A108 Products Massively parallel computer and software for scientists and engineers to slash the price of supercomputing. And that's not all. If Wavetracer's marketing rap is true, using the company's supercomputer to solve complex physical problems, such as analyzing the radar image of an aircraft wing, will be as easy as using a personal computer spreadsheet By focusing on providing software, and reducing the price of hardware, Wavetracer hopes to speed the commercial acceptance of massively parallel processing, an emerging computer architecture touted by many as the new standard. SUPERCOMPUTER, Page A98 Capitalization $2 investors 7 -iT IC j. 3 a ffli s.

GLOBE STAFF CHART New clubs on the block By Thomas Palmer GLOBE STAFF industrial nations meeting in Houston this week, it is subsidies to farmers and how to fairly ratchet them down that is the leading issue on the table. But there is much more to it than that The rules for trade in services, for the preservation of intellectual property rights, and for the tendency of the world to break itself up in trading blocs will be discussed in Houston, too. All these controversies must be resolved to some degree, then tabled, by the end of the three-year Uruguay Round of negotiations in December. But since the spring the GATT talks have been at an impasse and gloom about the future of free trade is growing. It was Thurow who said, at a symposium in Switzerland as long ago as 1988: "GATT is dead." Can it be? After the Bank for International Settlements, GATT is WARSH, Page A99 place, but don't tell the kids that).

There is the Burger King Kids Club, for hamburger lovers, and the Keebler Elf Fun Club, for cookie fiends. For chocolate mix fans, there is the Nestle Quick Hop Shop, and Delta Air i Lines has its Fantastic Flyer Club, with the Delta Air Lion. Channel 56 in Boston has its WLVI Kids Club, with more than 90 minutes of messages each week inter-; spersed within the breaks in its 40 hours of kids' programming. Oh, and there is the Mickey Mouse Club back, in its third incarnation, now associated with the Disney Channel on cable television. "All of these things in the broadest sense were consumer clubs," says John H.

Sweeney, vice president of the Communi-: que Group, a Newton advertising agency that specializes in organizing children's clubs. "Some encourage children to buy products on an ongoing basis, whether it's a magazine or a cereal Some were just to create a feeling of brand loyalty, where, 'I am part of this company, this And, surprisingly enough, there is long-range i brand loyalty when children become con-! sumers of these brands." Sweeney says Communique Group was KID CLUBS, Page A97 You've got to sell that burger or move those toys. You're targeting that fickle group known as the "tweens," but how do you reach them? Coast-to-coast skywriting planes are too expensive. M-I-C-K-E-Y M-O-U-S-E. Ah, now there is a solid strategy.

Invite them to join a club. Increasingly, product manufacturers, retailers and even television stations are asking pre teen consumers to join up. Be a member, kids are told, and, by the way, in the face of this torrent of competing merchandise, let's build a little brand loyalty for that snack food. At stake are billions of dollars spent by kids and tens of billions more whose spending is influenced by them. "The No.

1 way to get the attention of an adult who has a child is through the child," says one specialist in children's marketing. The Kraft Cheese Macaroni Club features Cheesjsaurus Rex. The Toys 'R' Us giraffe has Geoffrey's Fun Club. Kool-Aid has its Wacky Warehouse (a mythical Inside Booklets and stickers: Kraft Cheese and Boston's Channel 56 TV pursue the "tweens" market Beatson Wallace: Buy municipals as a matter of principal. Page A96.

Robert MetK Sell short only if you will accept serious "risks. Page A96. Mickey Monse Club lives, thanks to the Disney Channel..