ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Jun
10

Is Less More When Hosting International Events in Your Home Country?

In just a couple of weeks Baku is going to host the second Formula One Grand Prix in its history. Being in love with motor races and inspired by the fact that for the first time in my life I will attend such an important race (and the Land of Fire); I tried to explore the economic impact of hosting expensive international events for one’s country. In 2017, the Formula One Championship will take place in 20 countries. Nineteen of these countries are either in the top 15 by the level of GDP, or are (net) oil and gas exporters. The only exception here is Hu...
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May
22

Free or Fearful? The Fear of Floating in the South Caucasus

In economics there is a long-standing debate on whether emerging markets should adopt a fixed exchange rate currency regime or leave their exchange rates up to markets to decide. Intuitively, exchange rate is just another price, similar to the price on a sack of potatoes, a liter of milk or a kilogram of honey. Except that exchange rate is the price of 1 unit of foreign currency (say, 1 US dollar) in terms of our domestic currency. Textbook economics would tell us that price flexibility is essential for markets to function well, to quickly clear up any s...
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May
06

Not So Fast….Is The Nightmare of Georgian Road (Un)Safety About to End?

On April 21, the Parliament of Georgia approved changes to the Road Traffic law introducing the so-called demerit points system (DPS) in Georgia. Under the DPS every driver will receive a reserve of 100 points. For each traffic violation, in addition to monetary penalty, the points will be deducted from a 100 points “allowance”. Once the driver “burns” through all 100 points, his or her license will be revoked for one year. Those who do not burn through their points quickly will receive a new reserve of 100 points every year on January 1st. As a member o...
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Apr
01

"Georgian Railways" Reach a Critical Crossroads

  By Eric Livny, Georgia Today’s special correspondent in Tehran River Astarachay, which divides the Azerbaijani and Iranian nations, is no Rubicon, and its crossing over a newly constructed bridge by an Azərbaycan Dəmir Yolları’s GE/LKZ TE33A Evolution locomotive was hardly noticed by Georgian media. Yet, the project has immense implications for the future of transportation across the Caucasus.  President Ilham Aliyev’s visit to Tehran on March 5, 2017 (his third visit to the Islamic Republic in just as many years) was timed to provide him and...
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Mar
27

In Georgia Education Matters (But Probably Will Not Make You Rich)

“Education is what remains after one has forgotten what one has learned in school” – Albert Einstein It is widely recognized that education is the key to the future. In general, educated people have higher earnings and lower unemployment rates and highly-educated countries grow faster and innovate more than the other countries. Therefore, in the recent economic literature, education is considered as an investment good and look for the other investments, there is the costs and benefits of the investments in the education. The cost of the education is the ...
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