a minimax portfolio selection strategy with equilibrium a new minimax model on optimal portfolio selection with uncertainty of both randomness and estimation in inputs is established and the corresponding optimal portfolio is derived analytically based on this result a sufficient condition for the existence and uniqueness of a nonnegative equilibrium price system under which the total demand and supply of each asset are equal is provided and an explicit formula for such a price system is obtained furthermore some properties of the equilibrium are discussed

a physical view of sustainability abstract we assume that natural ecological communities tend to maximize the amount of stored biomass on a given area thereby creating the highest sustainable rate of entropy formation possible from that area we take this climax condition to define sustainability human intervention through agriculture reduced the ecosystem in given areas to a juvenile state a state which seems to produce entropy at a lower rate than that of the natural climax condition the gap in entropy production rates between the natural and the agricultural system would eventually be overcome by the direct and indirect use of fossil fuels these fossil fuels are consumed much faster than they are being formed and therefore a social structure based on their extensive use cannot be sustainable what type of social structure does meet our definition of sustainability that is what style and size of social activity will generate entropy at a rate no greater than that of the climax ecosystem in a particular area during the last two decades studies of economic activities and their environmental repercussions were limited to the possible costs and benefits of pollution control and to the economically optimal extraction rates of mineral resources the intrusion of human activities into the environment became increasingly apparent through the depletion of natural resource stocks and decreasing environmental quality in the 1990s sustainability of the socio economic system within the global ecosystem has become the pressing issue although research is increasingly concerned with the question of sustainability a definition based on physically measurable evidence is missing such a definition is proposed in this paper and an example application is given for a particular area

fuzzy turnover rate chance constraints portfolio model one concern of many investors is to own the assets which can be liquidated easily thus in this paper we incorporate portfolio liquidity in our proposed model liquidity is measured by an index called turnover rate since the return of an asset is uncertain we present it as a trapezoidal fuzzy number and its turnover rate is measured by fuzzy credibility theory the desired portfolio turnover rate is controlled through a fuzzy chance constraint furthermore to manage the portfolios with asymmetric investment return other than mean and variance we also utilize the third central moment the skewness of portfolio return in fact we propose a fuzzy portfolio mean variance skewness model with cardinality constraint which combines assets limitations with liquidity requirement to solve the model we also develop a hybrid algorithm which is the combination of cardinality constraint genetic algorithm and fuzzy simulation called fctpm

on the use of ecological prices and system wide indicators derived therefrom to quantify man s impact on the ecosystem abstract ecological prices and other system wide quantitative descriptors of ecosystem functioning are derived from the assumption that ecosystems allocate available resources efficiently among their components however ecological prices are not efficiency prices only and using them does not require one to assume that the ecosystem is completely controlled by man the same prices balance flows of different biomasses in a multicomponent system as such they play the role of exchange prices in a decentralized ecosystem properly defined with the help of ecological prices the resulting ecosystem productivity is no less a significant indicator of ecosystem functioning than the national product is significant for assessing the functioning of an economy considerations of the values taken simultaneously by our proposed indicators and by their economic analogs are of much help in judging the desirability of projects with relatively mild environmental repercussions these values are obtained from an integrated model of a system in which ecological and economic activities are intertwined however for the indicators to have an analytical meaning the methodology should be applied to trace only those dynamic paths during which the system possesses unique state dependent intensive properties in other cases a more comprehensive methodology one which also pays due regard to the viability of the ecosystem must supplement the analytical approach this rather comprehensive methodology is scale dependent and probabilistic in nature while delineating relations between the structure of the system and its behavior this method implies that efficiency and viability are two complementary rather than two commensurate attributes of a single entity an outside observer may be guided by his own values in his attempts to weigh these features but no inherent property of the system exists that supports his values unequivocally nevertheless this paper proposes an approximation to overcome this difficulty and to estimate a quantitative limit to the rate of substitution between productivity and viability such a limit is also an intensive property of the simulated system and the estimation of its value is shown to be crucial for studying the vulnerability of real ecosystems to severe man made disturbances

linking economic and ecological models for a marine ecosystem increasingly economists and ecologists have begun to recognize the value to public policy of combining information and results from each discipline into multidisciplinary studies here we present a methodological approach that links economic and ecological analyses we develop an economic ecological model by merging an input output model of a coastal economy with a model of a marine food web we describe distinct linear system sub models of the economy and the ecosystem and we develop a method for linking the two our method extends the work of earlier researchers by incorporating an ecosystem matrix into resource multipliers and by showing how these multipliers may be calculated we present a numerical example for the new england region using coastal economic and marine ecological data from the region for a restricted set of industry sectors and food web trophic levels we calculate resource multipliers for the example and we simulate the economic impacts of changes in primary production in the ecosystem on final demands for fishery products the results illustrate the effects of incorporating the impacts of habitat destruction and ecosystem structure on resource multipliers our approach can be extended to incorporate the full range of sectors in the economy and trophic levels in a linked ecosystem 2003 elsevier b v all rights reserved

what moves parties the role of public opinion and global economic conditions in western europe do western european political parties adjust their ideological positions in response to shifts in public opinion and to changing global economic conditions based on a time series cross sectional analysis of parties ideological dynamics in eight western european democracies from 1976 1998 the authors conclude that both factors influence parties ideological positions but that this relationship is mediated by the type of party specifically they find that parties of the center and right react to both public opinion and the global economy whereas parties of the left display no discernible tendency to respond to public opinion and also appear less responsive to global economic conditions the findings on leftist parties distinctiveness support arguments about these parties long term policy orientations as well as about their organizational structures the authors also find little support for neoliberal convergence arguments

quantification of interdependencies between economic systems and ecosystem services an input output model applied to the seine estuary abstract the aim of this paper is to assess the possible contribution of an input output model towards two of the basic principles of the sustainability strategy of integrated coastal zone management iczm and post normal science according to these principles decision support tools should offer a holistic perspective and handle high uncertainty the difficulties in reaching sustainability are due partly to the prevailing use of narrow system boundary tools that are non holistic consequently they fail to capture important ecosystem services and ignore interdependencies between them to comply with the basic principles our method allows environmental assets to be evaluated in multiple units and integrates results from recent researches in natural sciences both enable coverage of interdependencies between ecosystem services thereby we enlarge input output modelling from the two conventional ecosystem services of sink and provisioning to the most vital ones the supporting services an application to the seine estuary addresses the impacts of maritime transportation infrastructures on nursery habitats for commercial fish the ecosystem services covered are life support and resource provisioning our results show that the restoration of a total of 73 7 km 2 of nursery areas over the period 2004 2015 would result in a stock of sole in 2015 that exceeds the business as usual scenario by 44 2 uncertainty range 35 9 69 9 in spite of high restoration costs the negative macro economic impact is very low however on the sector level a trade off results between nurseries and three economic sectors the quantification of such trade offs in our model is particularly useful to public participation in decision making

effects of a carbon price in the u s on economic sectors resource use and emissions an input output approach abstract despite differences in their implementation most carbon policies aim to have similar outcomes effectively raising the price of carbon intensive products relative to non carbon intensive products while it is possible to predict the simple broad scale economic impacts of raising the price of carbon intensive products the demand for non carbon intensive products will increase understanding the economic and environmental impacts of carbon policies throughout the life cycle of both types of products is more difficult using the example of a carbon tax this study proposes a methodology that integrates short term policy induced consumer demand changes into the input output framework to analyze the environmental and economic repercussions of a policy environmental repercussions include the direct and the indirect impacts on emissions materials flow in the economy and the reliance on various ecosystem goods and services the approach combines economic data with data about physical flow of fossil fuels between sectors consumption of natural resources and emissions from each sector it applies several input output modeling equations sequentially and uses various levels of aggregation disaggregation it is illustrated with the data for the 2002 u s economy and physical flows the framework provides insight into the short term complex interactions between carbon price and its economic and environmental effects

the public as thermostat dynamics of preferences for spending theory democratic accountability requires that the public be reasonably well informed about what policymakers actually do such a public would adjust its preferences for more or less policy in response to policy outputs themselves in effect the public would behave like a thermostat when the actual policy temperature differs from the preferred policy temperature the public would send a signal to adjust policy accordingly and once sufficiently adjusted the signal would stop hypotheses in domains where policy is clearly defined and salient to the public changes in the public s preferences for more policy activity are negatively related to changes in policy methods a thermostatic model of american public preferences for spending on defense and a set of five social programs is developed and then tested using time series regression analysis results changes in public preferences for more spending reflect changes in both the preferred levels of spending and spending decisions themselves most importantly changes in preferences are negatively related to spending decisions whereby the public adjusts its preferences for more spending downward upward when appropriations increase decrease thus consistent with the eastonian model policy outputs do feed back on public inputs at least in the defense spending domain and across a set of social spending domains

political parties world demand and unemployment domestic and international sources of economic activity this article replicates and extends earlier work on the politics of macroeconomic policy by considering political effects on unemployment in 14 western industrial nations between 1960 and 1983 changes of party control of government display broadly the expected effects namely that unemployment falls under left wing governments and rises under right wing governments however the principal conclusions of this article are that partisan effects on unemployment in open economies that is economies heavily dependent on trade with other countries can only be satisfactorily estimated relative to the constraint imposed by the level of world economic activity and that in addition to politicians strategic incentives political institutions and economic regime constraints also determine whether partisan effects on unemployment will be sustained transitory or absent with respect to the latter on the whole no effects are found where no such effects were promised by the new government before taking office where one party or dominant partner coalitions form the effect on unemployment is transitory whereas where broad coalitions form it is sustained or absent finally ceteris paribus any partisan effects are more likely where governments secure parliamentary majorities

the cost of ruling cabinet duration and the median gap model in a recent article paldam and skott 1995 provide atheoretical explanation for an important empirical phenomenonin democratic countries incumbent governments tend to losevotes in this paper i show that paldam and skott stheoretical explanation for this cost of ruling ispotentially much stronger than they recognize specifically when generalized in a straightforward way their modelexplains not only the cost of ruling itself but also a secondwell established empirical fact that the longer an incumbentgovernment has been in power the more votes it loses further this generalization of the model produces twoadditional empirical hypotheses that have not yet been testedin the empirical literature

concepts of efficiency in ecological economics sisyphus and the decision maker abstract efficiency forms the bedrock of policy planning and business approaches to sustainable development but what do ecological economists mean by efficiency in the resource use context efficiency has a wide range of potential interpretations from the ratio of work output energy inputs to pareto efficiency despite the potential richness of the efficiency concept in practice efficiency is often narrowly conceived within disciplinary boundaries this appears to be the case even in ecological economics which purports to be transdisciplinary and pluralistic such narrow disciplinary perspectives essentially waste the richness of the efficiency concept this wasting could mean ecological economists and decision makers are destined to sisyphean toil in the pursuit of sustainable development this paper explores the efficiency concept and its interpretation it then reviews ecological economic literature to find that there is much room for improvement in the way ecological economists apply efficiency finally the paper presents a framework within which a truly ecological economic approach to efficiency can emerge armed with this framework policy makers and planners should be better prepared to make decisions leading to sustainable development

the role of thermodynamics in the study of economic and ecological systems abstract economic theory has always maintained that economic value is generated solely within the economy where it is fully distributed among the factors of production before being consumed according to this theory the economy is an isolated system that does not need flows to pass across its boundaries in support of its steady state general equilibrium from a thermodynamic point of view this idea is unacceptable according to thermodynamic theory any open system which allows flows of matter and energy to cross its boundaries is capable of maintaining itself in steady state only because it transport value from its environment to restore the value that has been consumed within the system and dissipated drawing on the analogy with thermodynamics this paper replaces the traditional systemic analog of the economy which is the closed circular flow process with the steady flow process according to this analog any efficient economy is an open system both physically and economically requiring a flow of economic value to maintain its steady state in other words an economically isolated system has to be inefficient and is bound to misallocate and overuse environmental resources whether the economy behaves as an economically isolated inefficient or open efficient system is an empirical question however if real economies are economically open and efficient and environmental resources are abused due to the economy s unrestrained material growth parts of traditional economic theory espicially those related to benefit evaluation will have to be modified policy recommendations will be affected in any case because internalization the panacea of resource misallocations cannot be more than a temporary solution instead of opening the economy internalization encloses the harmed resource and saves it by abusing excessively other environmental resources

economy and environment a theoretical essay on the interdependence of economic and environmental systems preface notation guide 1 introduction part i the physical economy environment system 2 closed physical systems a model 3 structure and time in the physical system 4 technological change and the environmental constraints to physical growth part ii the economic system 5 the price system 6 prices property and the environment 7 economic conflict and environmental change part iii environmental strategies in an evolutionary economy environment system 8 time uncertainty and external effects 9 the market solution 10 the stationary state 11 conclusions references index

a rational voter explanation of the cost of ruling it is well known that the average government loses votes the so called cost of ruling we show that the loss can be explained as a perfectly rational demand for change in a median voter model once the model is amended to let the two parties be visibly different

fuzzy multi period portfolio selection with different investment horizons abstract this paper considers a fuzzy multi period portfolio selection problem with v shaped transaction cost compared with the traditional studies assuming that assets have the same investment horizon we handle the practical but complicated situation in which assets have different investment horizons within the framework of credibility theory a mean variance model is formulated with the objective of maximizing the terminal return under the total risk constraint over the whole investment alternatively a variation is given by minimizing the total risk under the terminal return constraint a fuzzy simulation based genetic algorithm fsga is designed and three numerical examples are given to illustrate the effectiveness of the proposed approach

ecological pricing and transformity a solution method for systems rarely at general equilibrium abstract this paper outlines a new method for determining ecological prices transformities in complicated ecological economic systems where non equilibrium prices are likely to be prevalent that is an eigenvalue eigenvector mathematical solution method for solving an overdetermined homogeneous system of simultaneous linear equations is proposed and tested previous mathematical approaches to the problem of ecological pricing are reviewed before proceeding with an explanation of the new solution method for the determination of ecological prices the proposed method seeks to avoid the need to make a number of untenable assumptions used in previous methods e g the assumption that there necessarily needs to be an equal number of processes and quantities in the ecological economic system the paper also provides practical advice and an algorithm for solving the ecological pricing problem for example advice on how to overcome the problem of ill conditioned matrices which are sometimes encountered

conservation of mass and instability in a dynamic economy environment system abstract this paper considers a variant of the neumann leontief sraffa general equilibrium models in the context of a jointly determined economy environment system subject to a conversation of mass condition it shows that the conservation of mass contradicts the free disposal free gifts and non innovation assumptions of such models that an expanding economy will be associated with continuous disequilibrating change in the material transformations of both economy and environment and that this change is uncontrollable through the price system

measures of energy cost and value in ecosystems the physical output of ecological processes have different values even though they may be measured in the same physical units using linear input output theory we derive a set of weights based on direct and indirect energy requirements for ecosystem commodities which uniquely converts them into commensurable unit costs under certain conditions these costs are equal to values or prices using this system behavioral theories can be better posed for experimental verification

portfolio selection and asset pricing three parameter framework idiosyncratic security risks are modelled as following a joint spherical distribution characterized by a mean vector and a generalized covariance matrix skewness is generated by a single factor for the whole economy but upon which different securities have different loadings this results in three fund separation two funds to span the spherical risk and one more fund to span the additional skewness risk a three parameter normative portfolio analysis that allows short sales restrictions is developed in addition a three parameter capital asset pricing model is provided

portfolio rebalancing model with transaction costs based on fuzzy decision theory the fuzzy set is one of the powerful tools used to describe an uncertain environment as well as quantifying any potential return and risk portfolio liquidity is taken into account and a linear programming model for portfolio rebalancing with transaction costs is proposed the level of return that an investor might aspire to the risk and the liquidity of portfolio are vague in an uncertain financial environment considering them as fuzzy numbers we propose a portfolio rebalancing model with transaction costs based on fuzzy decision theory an example is given to illustrate the behavior of the proposed model using real data from the shanghai stock exchange

ecosystem service appropriation in the auckland region economy an input output analysis patterson m g mcdonald g w and smith n j ecosystem service appropriation in the auckland region economy an input output analysis regional studies this paper assesses the appropriation of ecosystem services by the auckland region economy in new zealand a novel application of environmental input output analysis is used to trace biophysical interdependence within the regional economy the methodology provides a step by step procedure for tracing the appropriation of various ecosystem services using infinite regress chains displayed as appropriation chain diagrams critical dependencies on ecosystem services are revealed throughout the economy through case studies of two selected industries namely air transport and business services patterson m g mcdonald g w et smith n j l affectation des services de l ecosysteme dans l economie regionale d auckland une analyse repartition redistribution regional studies cet article cherche a evaluer l affectation des services de l ecosysteme par l ec

a rational explanation for home country bias abstract while modern portfolio theory predicts that investors should diversify across international markets corporate equity is essentially held by domestic investors french and poterba 1991 french k poterba j 1991 investor diversification and international equity markets american economic review 81 222 226 suggest that in order for this bias to be justified investors must hold optimistic expectations about their domestic markets and pessimistic expectations about their foreign markets tesar and werner 1995 tesar l l werner i m 1995 home bias and high turnover journal of international money and finance 14 467 492 find existing explanations for the home equity bias unsatisfactory and conclude that the issue poses a challenge for portfolio theory we develop a model that incorporates both the foregone gains from diversification and the informational constraints of international investing and shows that home equity bias is consistent with rational mean variance portfolio choice specifically we prove that the nature of estimation risk in international markets can be responsible for this phenomenon we show that when the cross market variability in the estimation errors of international markets means far exceeds the cross market variability in the means themselves domestic dedication dominates international diversification an examination of 11 international markets returns over the last 25 years from the perspective of german japanese and us investors provides evidence consistent with this explanation

dea frontier improvement and portfolio rebalancing an application of china mutual funds on considering sustainability information disclosure abstract data envelopment analysis dea has been a widely used methodology for evaluating the relative performance of portfolios extensive work has appeared for realizing the role of dea in the aspect of assessing portfolio performance and deriving the relative rankings however the role of providing realizable benchmarks is not fully explored in the existing literatures most importantly the dea based portfolio performance evaluation methods developed in the existing literatures can hardly provide support for fund managers in pursuing sustainability performance in this paper we first propose a dea frontier improvement approach under the mean variance framework this approach provides investor with a rebalancing strategy as well as an improved dea frontier which approximates the portfolio efficient frontier better than the traditional dea model does then this approach is extended to a general return risk framework our in sample simulation results verify the effectiveness of the proposed approach for a wide range of applications in addition the out of sample tests show that the rebalancing investment strategies can achieve higher sharpe ratios and sortino ratios than those of the original ones finally we apply the proposed approach to evaluate mutual fund performance in china with the consideration of sustainability information disclosure we construct a disclosure index to indicate the extent of sustainable information disclosure of each mutual fund the results show that the proposed approach provides not only investment recommendations but also references for constructing sustainable green funds

notes a reformulation of a mean absolute deviation portfolio optimization model the purpose of this note is to present a reformulation of the model presented by konno and yamazaki 1991 in their paper it was claimed that under the assumption that there is no upper limit on the investment in an asset the number of nonzero assets in the optimal portfolio is at most 2t 2 where t is the number of time periods in the data base used to approximate the parameters of the return distributions of the assets the formulation we present which is shown to be equivalent to that of konno and yamazaki has a bound of t 2 on the number of nonzero assets in the optimal portfolio

ecosystem prices activity analysis applied to ecosystems abstract in this paper a method is developed to derive prices for natural goods from information about material and energy flows within ecosystems the derivation is based on an analogy between ecological and economic systems both systems are characterized by flows of material and energy to derive ecosystem prices the mathematical structure of koopman s economic linear production model his activity analysis is applied to a material flow model of ecosystems the ecological interpretation of these prices is discussed and the uniqueness of the price system is investigated an algorithm for price calculation is derived and demonstrated with a numerical example finally it is discussed whether ecosystem prices may be suitable as surrogates for economic valuations of natural goods

policy mis representation and the cost of ruling u s presidential elections in comparative perspective the cost of ruling effect on electoral support is well established that is governing parties tend to lose vote share the longer they are in power although we know this to be true we do not know why it happens this research examines whether the cost of ruling results at least in part from the tendency for governing parties to shift policy further away from the average voter it first considers differences in political institutions and how they might influence cost of ruling owing to policy drift and then tests the hypothesis focusing on u s presidential elections which is an unfavorable case to find such an effect results confirm a clear cost of ruling effect in these elections and demonstrate that policy misrepresentation is an important mechanism that is the policy liberalism of presidents from different parties diverges over time as their tenure in the white house increases and the degree to which it does matters for the presidential vote policy is not the only thing that matters and other

integrating the valuation of ecosystem services into the input output economics of an alpine region traditional economic accounting mostly ignores the benefits provided by nature and thus falls short in giving incentives for improving the way the economy uses natural resources in this study we develop a general framework for integrating the value of ecosystem services into an input output table in particular we integrate regionally valued ecosystem services on the supply side of an input output table to quantify what natural resources offer to economic development using several different indicators we show the benefits of the ecosystem services under the status quo and a scenario for regional development our results suggest that economic activities should be encouraged to use the ecosystem services more intensively while landscape development should aim at providing the required services we conclude that such an approach can provide a platform for decision makers to learn quantitatively about the dependency of the regional economy on natural services

ecological pricing and economic efficiency abstract there is a need to accurately account for the contributions of environmental assets to the overall economy such accounting would permit policies that allow protection of important natural resources and aid the analytic process to determine an accurate basis for a sustainable economy the aim is to develop an accounting framework for ecology that is sufficiently consistent with the economic framework that the two can be fruitfully combined with appropriate definitions of the flows the two systems can be connected into a common framework no single measure of the system productivity and efficiency can be given for the combined system however until the ecosystem metabolism can be converted into economic terms this could be done with a series of economic valuation techniques ecological prices could then be estimated and a single measure of ecological economic output could be given with the net combined system input and output now in common terms a technical system efficiency measure can logically be proposed because human activity inevitably involves dissipation such emissions would now have a monetary price because such emissions are irrecoverable the total output of the combined system is greater than it is under the current definition giving rise to a technical system wide efficiency measure

estimation risk in portfolio selection the mean variance model versus the mean absolute deviation model konno and yamazaki konno h k yamazaki 1992 mean absolute deviation portfolio optimization model and its applications to tokyo stock market management sci 39 519 531 propose the mean absolute deviation mad model as an alternative to the mean variance mv model they claim it retains all the positive features of the mv model saves the investor computing time and does not require the covariance matrix this paper shows that ignoring the covariance matrix results in greater estimation risk that outweighs the benefits in both models estimation error is more severe in small samples small observations relative to the number of assets and for investors with high risk tolerance the mv model s lower estimation risk is most striking in small samples and for investors with a low risk tolerance

what is the opportunity cost of mean variance investment strategies an analytical framework is set up to evaluate the foregone opportunity cost of mean variance investment strategies a parametric structure of the joint distribution of security returns for which mean variance investment strategy is suboptimal is specified for all constant absolute risk aversion investors the optimal strategy its corresponding mean variance alternative and the foregone opportunity cost of mean variance investment strategy are analytically derived and operationalized empirically when the investor s opportunity set includes the riskless asset the premium to replace the mean variance investment strategy by its optimal one does not exceed 0 05 cents on an invested dollar regardless of the investor s risk aversion when the riskless asset is denied the opportunity costs of mean variance investment strategies increase with the degree of risk aversion