SUMMER 1999 M any different investment objectives and criteria have been suggested for choosing investment strategies. In a static setting, Markowitz [1952] suggests the meanvariance approach. Economic theory more formally postulates that an individual investor would choose an investment strategy to maximize expected utility of wealth and or consumption. In other settings, other criteria might ...

Individual decision-making forms the basis for nearly all of microeconomic analysis. These notes outline the standard economic model of rational choice in decisionmaking. In the standard view, rational choice is defined to mean the process of determining what options are available and then choosing the most preferred one according to some consistent criterion. In a certain sense, this rational ...

In response to the need expressed by the UN General Assembly, an economic vulnerability index (EVI) has been defined by the Committee for Development Policy. The present paper, which refers to this index, first examines how a structural economic vulnerability index can be designed for the low-income countries in particular. It recalls the conceptual and empirical grounds of the index, considers...

The Ramsey model of economic growth is revisited from the point of view of viability compared to optimality. A viable state is a state from which there exists at least one trajectory in capital, consumption, and reproduction that remains in the set of constraints of minimal consumption and positive wealth. There exists a largest set of viable states, including all others, called the viability k...

Despite much work on hedging in incomplete markets, the literature still lacks tractable dynamic hedges in plausible environments. In this article, we provide a simple solution to this problem in a general incomplete-market economy in which a hedger, guided by the traditional minimum-variance criterion, aims at reducing the risk of a non-tradable asset. We derive fully analytical optimal hedges...