ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
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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Jun
26

The Brutal Revolution

  When offered the ISET director job back in March 2007, I did not think twice. Everything I’ve read about Georgia until then was incredibly positive. Livable, hospitable, beautiful, corruption free, etc. etc. The latter part sounded particularly promising given that during my last days in Moscow (I lived and worked in Moscow from 1993 till 2007) I had my brand new BMW motorbike stolen in broad daylight by a local police officer (sic!) who knew that I am about to leave the country and probably thought that there would be no use for motorbikes on Geo...
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Mar
20

All the Roads Lead to Tskaltubo

FROM BADEN-BADEN “Roulette until six in the evening. Lost everything”, notes Leo Tolstoy on July 14, 1857. He did not pen these words in Moscow or St Petersburg”, writes Elizabeth Neu. “It was in Baden-Baden that Tolstoy closed his diary with a sigh that night.” “Tolstoy was not the only literary genius to have travelled thousands of miles from Russia to take the waters and enjoy the thrill at the roulette tables… and to leave with empty pockets. They all flocked here: the great realist Ivan Goncharov and the enthusiastic young ballad rhymer Vasili Zhuko...
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Feb
27

Making Sense of FDI Dynamics

Foreign direct investment (FDI) is critical to every developing county, and Georgia is no exception in this regard. Georgia wants to grow out of poverty and catch up with the economically more developed regions of the world – for this to happen, foreign resources are needed, in particular if the domestic savings rate is as low as in Georgia. Yet FDI is not only about the capital which is made available to the economy but also, and even more importantly, about trust foreigners have into the Georgian economy. It is one thing to make cheerful statements abo...
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Feb
13

Harmonize, but do not Harm!

The “do no harm” (primum non nocere) principle is well known to students of medical schools. It is one of the most fundamental maxims in medicine, as formulated, for example, in the Epidemics book of the Hippocratic Collection: “The physician must ... have two special objects in view with regard to disease, namely, to do good or to do no harm". Doctors are taught that medical interventions are not risk-free. Thus, when facing a “problem” one should consider whether to use a particular procedure (e.g. surgery or chemical treatment) or do NOTHING. Not surp...
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