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ISET Economist Blog

A blog about economics in the South Caucasus by ISET
Levan Pavlenishvili has not set their biography yet
Mar
06

Economic Freedom (Act): Do We Need It or Not?

The so-called “Economic Freedom Act” (EFA), which has been a matter of public discussion in recent weeks, refers to two pieces of legislation: (i) a Constitutional amendment from 2010, which requires a referendum for introducing new taxes or increasing the tax rate, and (ii) the Law on Economic Freedom (2011), in force since 2013, setting a number of additional restrictions to government fiscal policy (Table 1). Table 1. Law on Economic Freedom in Short Number of Tax...
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Jan
30

The Gazprom Deal and Georgian Energy Security. What Should Georgia do Next?

Every winter, one of the most actively discussed issues of energy policy - both on TV and in professional circles - is natural gas. Prices and supply conditions are frequently part of the political debate. The main reason behind such active discussion is energy security concerns. What is energy security? The International Energy Agency defines energy security as “the uninterrupted availability of energy sources at an affordable price.” Obviously, all countries around the world care about energy security, because interruptions in the availability of energ...
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Nov
19

Net Metering in Georgia. Getting Ready for the Next Energy Revolution

"We have this handy fusion reactor called the SUN. You don't have to do anything, it just works, shows up every day, produces ridiculous amounts of power." Elon Musk Introduction of Tesla Energy A few weeks ago Elon Musk (CEO of SpaceX and Tesla Motors and Chairman of SolarCity, among others) presented two new products: solar roof tiles produced by SolarCity, and Tesla’s Powerwall 2, designed to work together to revolutionize the concept of solar PV systems. Energy sector professionals, environmentalists, and renewable energy enthusiasts around the world...
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May
08

No Price Caps in the Electricity Wholesale Market!

This article is about a highly technical matter. To avoid losing all our readers in the very beginning, let us start with a famous doctrine by Montesquieu: Les lois inutiles affaiblissent les lois nécessaires. This principle, literally meaning “useless laws weaken the necessary laws”, should always be kept in mind by lawmakers and politicians. If a regulation is not beneficial, then it is almost surely beneficial to get rid of the regulation. Some great Georgians endorsed this principle, like Kakha Bendukidze, who is widely praised for having erased many...
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Sep
24

Azerbaijan Economy and the Oil Prices: a Blessing in Disguise?

International crude oil prices, which have hovered at $110 per barrel for the last three and a half years, started a sudden and abrupt downfall in August 2014, reaching a $50 per barrel mark in just five months. More than a year after the event, it looks like the oil price of $50 per barrel is here to stay, at least for the foreseeable future. BLAME THE TECHNOLOGY The primary reason behind the drop was undoubtedly the technological advances in shale oil and gas extraction in the United States – a boom so big, that the US is now poised to become a net ene...
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Sep
18

Confidence Matters!

Georgian consumer confidence suffered a major blow at the end of 2014, in the wake of the sharp Lari depreciation. Around February 2015, the Index found some support at the very low level of -35-30 points, and has been slightly improving since then. In July 2015, this mildly positive trend was reversed, and in August, the Index dropped another 4.1 points to reach a new historical minimum of -38.4 points. Interestingly, this entire drop was driven by older respondents, those aged over 35. We will come back to this point later in the article. At the same ...
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