ISET

ISET Economist Blog

A blog about economics in the South Caucasus by ISET
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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Feb
06

Failure is Always an Option! Or is it?

“The type of failure we’re talking about is like how frogs lay 20,000 eggs so a few wind up as adults sitting on a lily pad sucking down mosquito dinners” is how the author of the recent Newsweek article describes the rate of failure it takes to breed a handful of unicorns-tech startups valued at more than $1 billion. Failure has increasingly become a chapter in success stories; stories which inspire a new generation of entrepreneurs to try, fail, try again, and succeed. Economics, as we have come to know it, is about efficient allocation of resources. R...
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Feb
04

How to De-Dollarize in a Smart Way: Lessons from the Georgian and Foreign Experiences

Unofficial (partial) dollarization describes a situation when a foreign currency is used alongside the domestic currency for transactions purposes and as a store value. High partial dollarization is not good for a country, as it ties the hands of its Central Bank when it wants to use monetary policy. In a highly dollarized economy, national currency depreciation can even lead to financial instability. As a transition economy, Georgia is characterized by high levels of dollarization. Therefore, recent waves of lari depreciation has prompted authorities to...
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Jan
21

Money for Nothing: Why Don’t Georgian Students Act Like Investors?

Back in 2005, the Georgian government introduced the Unified Entry Examinations (UEE) for admittance into universities. Before the UEE, each university had their own set of entry examinations and examiners, which opened the system to abuse and corruption. With the introduction of the UEE, the government of Georgia managed to make the system fairer and more transparent. As part of this process, the government provides merit-based scholarships to students, based on standardized test scores. The very best students can get up to 2,250 GEL per year for all th...
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Recent Comments
Tamta Bibiluri
Should we expect that all schools in Georgia are as credible as ISET. There is clear threat of corruption, would the government be... Read More
Monday, 23 January 2017 8:08 PM
Salome Deisadze
Tamta, I agree that it creates a lucrative opportunity for corruption and this process needs to be monitored very strictly. Relat... Read More
Tuesday, 24 January 2017 7:07 AM
Salome Deisadze
Well, poor families, who cannot afford to private tutors to pass the UEE with high scores and get scholarship (most schools do not... Read More
Thursday, 26 January 2017 8:08 AM
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Jun
19

A Temporary ‘High’? Improvements in Business, Consumer Confidence Should Not Distract Policy-Makers from the Long-Term View

In the year of elections any piece of economic analysis is usually seasoned with a hefty dose of caution. Every analyst is aware of the fact that the incumbents will be too eager to oversell the ‘good’, while the opposition will pound on the ‘bad’. Weary of taking sides in political battles, economists usually switch on their primary defense mechanism: they start relying (heavily) on the annoying “on the one hand”, “on the other hand” kinds of phrases. I am of course referring to Georgia in the year of 2016. What people should keep in mind, however, is t...
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Nov
25

Economic Reflections in the Kakheti Mountains

Over the last weekend I was invited by an international development bank to run a workshop in the nice Hotel Eden in Kvareli, Kakheti. The topic of the workshop was “Georgia’s economic future”. We started the workshop by discussing the great promise of development economics: “Do the right policy, and you’ll be fine”. Economists like Thorvaldur Gylfason like to show the growth paths of pairs of countries with somewhat similar characteristics, like Mauritius and Madagascar, Singapore and Malaysia, Botswana and Nigeria, and Ireland and Greece. In these pair...
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Recent Comments
Guest — Eric Livny
Having just come from Korea, and having observed the Korean economic miracle from close range (thought not at great depth), I can ... Read More
Tuesday, 25 November 2014 4:04 PM
Guest — NP
Very nice! Now, here is a (provocative?) comment about the following statement (and what follows it). "Afterwards, a country has t... Read More
Tuesday, 25 November 2014 4:04 PM
Guest — Adam
I still think there's plenty of room for growth in all sectors in Georgia and I see catch-up growth everywhere I go. There's now a... Read More
Tuesday, 25 November 2014 8:08 PM
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