Journal Article The Ordering of Portfolios in Terms of Mean and Variance Get access John S. Chipman John S. Chipman University of Minnesota Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 40, Issue 2, April 1973, Pages 167–190, https://doi.org/10.2307/2296646 Published: 01 April 1973

I. Introduction, 347. — II. Production functions and producer equilibrium, 352. — III. Demand functions and supply of labor, 356. — IV. Equilibrium under laissez-faire, 358. — V. Ideal output, 362. — VI. Taxes, bounties, and optimality rules, 366. — VII. Analysis in terms of consumers' surplus, 373. — VIII. Dynamic stability of the adjustment process, 381.

first-order stationary Markoff process with zero mean and autocorrelation coefficient p, - 1 < p < 1, the greatest lower bound for the efficiency of the least-squares estimator of 8 (relative to the Gauss-Markoff estimator) over the interval 0;p < 1 is .753763. This compares with a greatest lower bound of .535898 for the relative efficiency of the Cochrane-Orcutt estimator of 38.

This paper analyzes a one-commodity model in which alternative investment projects are characterized by return functions indicating the output intensities over time resulting from an initial unit investment. Saving is generated partly by households as a constant fraction of net income, and partly by business firms in accordance with a depreciation (or replacement) policy. It is shown that when a declining value depreciation policy is adopted, the ordering of consumption streams in terms of their present values, at any fixed interest rate for which these converge, induces an ordering of investment projects in terms of their internal rates of return. The same ordering of projects is also induced by applying the overtaking criterion to the consumption streams.

THE CELEBRATED factor price equalization theorem has a curious history. Ohlin (1933) introduced to English-speaking readers an important modification to international trade theory, replacing the classical simplification, of constant costs but differing production functions among countries, with the alternative simplification of identical production functions but differing factor endowments. While many economists have remarked on the unrealism of Ohlin's simplification, an important aspect of it has not, it would seem, always been sufficiently appreciated. This is the fact that the classical model assumed that production relations in different countries differed in a quite arbitrary fashion; no satisfactory way had been provided for explaining how such production relations differed. In the Ohlin model, on the other hand, an element of continuity was introduced, since continuous variation of factor endowments would yield continuous (rather than arbitrary) variation in production relations. Even if differences in production relations (specifically, in transformation functions) cannot be completely explained in terms of differences in factor endowments, the Ohlin model is nevertheless susceptible to amendments that preserve meaningful relationships between different countries' production functions. Ohlin's writings were greatly influenced by Heckscher (1919), whose work was not made available in English until 1949. Heckscher, in turn, acknowledged the influence on his thought of Wicksell (1919).' Ohlin asserted that there was a tendency towards factor price equalization as a result of free trade, but he tempered his argument with many qualifications, even to the point of asserting that equalization would never be complete. The partial equalization argument was taken up and made rigorous by Stolper and Samuelson (1941), and later Samuelson (1948,