ISET

ISET Economist Blog

A blog about economics in the South Caucasus.

Florian Biermann is assistant professor at the International School of Economics at Tbilisi State University (ISET). Until 2005, he studied economics at the Humboldt University Berlin and the Free University of Berlin. After working for a year at the Institute of Mathematical Economics of Bielefeld University, in 2006 he moved to Jerusalem to pursue his Ph.D. degree at the Hebrew University (degree awarded in 2012). His doctorate was supervised by Professors Eyal Winter and Bezalel Peleg. Florian is interested in game theory, microeconomics, and mathematical economics.

Sep
23

Georgian Egg Prices: the Roller Coaster Ride Continues

About 9 months ago, we were already discussing the oddities of egg prices in Georgia (“The Georgian Egg of Discord”, by Giorgi Kelbakiani and Eric Livny). At that time, a huge volatility in the egg prices could be explained by interesting political dynamics. Under the UNM government, local producers of eggs were largely protected from external competition through non-tariff import barriers, called by the ministry of agriculture a “complete violation of law and international agreements”. However, through these measures, a relative stability of egg supply ...
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Sep
16

Who Defends the Workman’s Interests?

Assume you want to buy tomatoes at a vegetable market in Tbilisi. At a booth, you see beautiful tomatoes of flawless quality, red, fleshy, and shiny. Right next to them are offered semi-rotten tomatoes with corky blotches, but to your surprise, both kinds of tomatoes are tagged with the very same price. “Something wrong with this seller”, you may think and buy the shiny tomatoes. When we speak about market failure in economics, we usually mean that the economy is in a situation in which we can make everybody better off without making anybody worse. A sta...
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Sep
09

The New Prescription Rules: Repeating Western Mistakes

So far, many Georgians solved minor health problems in a non-bureaucratic way. Instead of consulting doctors, they asked friends, relatives, and the internet what medicine should be taken as a remedy for a given issue. Once they had received enough information, they went to a pharmacy, and, with some additional advice from the pharmacist, bought the medicine they expected to be helpful. This practice has now come to an end. From September 2014, a large number of pharmaceuticals labeled as “second group medicines”, including painkillers and antibiotics, w...
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Jul
11

The Multigenerational Country

What is a family? Posing this question to a child in, say, Sweden, would almost surely lead to the answer “mum, dad, and children”. What would be the answer in Georgia? In Georgia, a child would most likely answer “grandmother, grandfather, mum, dad, and children”.  The multigenerational family, nowadays almost unknown in the economically more developed parts of the world, is still very common in Georgia. 2013 data of UNICEF derived from a sample of roughly 3000 Georgian households reveal the extent of this phenomenon. According to these data, in ab...
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Jun
23

On Soviet Science

As an active chess player, many of my Georgian acquaintances happen to be old men, and among them are several former Soviet scientists: physicists, mathematicians, statisticians, and engineers. Ever since I am living in Tbilisi, they like to pull my leg regarding my scientific achievements. “With a Ph.D.”, they enjoy to say, “in the Soviet Union you would have been not more than a ‘candidate of science’”. Talking with my chess friends, I came to the conclusion that old Soviet professors are prone to hierarchical thinking. And when I was collaborating wit...
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Jun
02

Pawnshop Mentality

“Jewelry you can pawn whenever you encounter financial difficulties", we were told by a friend. In our circles of acquaintances there are quite a number of people who enjoy the services of pawnshops. The reasons range from renovating apartments, paying tuition for children, and buying new hi-fi systems for the car, to repaying the 1000 lari that the 18 year-old son had lost in gambling. According to a survey of GeoStat (which accounts for all figures provided in this article), in 2013 the annual interest rate on pawnshop loans was 54,1%. For loans denomi...
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