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ISET Economist Blog

A blog about economics in the South Caucasus.
Aug
30

Where is the age of discovery?

The scars of the 2008 global financial crisis, and the festering wounds of the ongoing European debt crisis seem to have obscured one simple textbook truth: long-term economic development largely depends on the growth of the total factor productivity (TFP), sometimes referred to simply as the technological progress. TFP, however, is an elusive phenomenon. This is usually the unexplained part of the output growth, the “residual” left over after we have accounted for all other known contributing factors.  Another uncomfortable truth is that technologi...
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Guest — Eric
Thanks for a great post, Yasya! Just curious: how do US and Germany compare on the TFP component of their growth since 1970? As fa... Read More
Thursday, 30 August 2012 3:03 PM
Guest — Yasya
Eric, I completely agree, not all countries should send rovers to Mars! However, both basic (fundamental) research and the applie... Read More
Thursday, 30 August 2012 11:11 PM
Guest — Eric
According the NBER paper you referenced, the US is really exceptional in that a very large portion of its growth (coded as "TFP") ... Read More
Friday, 31 August 2012 12:12 PM
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Aug
28

Georgia‘s Partnership Fund

With the recent changes in the Georgian government the Partnership Fund has received renewed attention. The fund is now head by two political heavy weights, the former Prime Minister, Nika Gilauri, and the former Minister of Finance, Dima Gvindadze. As the Messenger reports: The foundation aims to facilitate cooperation between the public and private sector, creating investment projects, jobs, attract foreign investment and generally contribute to the development of the country’s economy. The four priority sectors include energy, agriculture, industry an...
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Jul
30

The Case Of Tbilisi Hippodrome – Urban Planning Mistake Or A New Approach To Regional Policy?

Despite arduous government efforts to reduce regional disparities, population and wealth are very unevenly distributed across Georgia’s territory. The largest city, Tbilisi, is pulling scarce human and financial resources away from other major cities, which in turn compete with smaller towns and villages in their immediate locale. Tbilisi’s population is already more than five times larger than that of Kutaisi, the second largest Georgian city (200,000 people). And while no precise data is available the gap is likely to be growing further. In principle, ...
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Guest — david lee
I sense an element of criticism through faint praise if not sarcasm in your assertion that it is innovative planning to make Tbili... Read More
Monday, 30 July 2012 5:05 PM
Guest — Eric
David, you are absolutely right as far as my assessment of the decision to destroy the hippodrome is concerned. I am not aware of ... Read More
Monday, 30 July 2012 6:06 PM
Guest — Timur
Building this road is also consistent with building a light rail line running on Chavchavadze Avenue. Some rerouting of road traff... Read More
Monday, 30 July 2012 7:07 PM
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Jun
05

Are Georgian Village Communities able to Organize Themselves?

This week marks the first anniversary of the “ISET Khachapuri Index” in The Financial. During the last 12 months, our faithful readers have followed the ups and the downs of the index, and learned many economics lessons in the process. The sharp seasonal fluctuations of the Khachapuri Index are very much reflective of the state of Georgian agriculture: fragmented, unorganized and underdeveloped. The roller coaster of agricultural production is no great fun for consumers and small Georgian farmers alike. When bringing their products to the bazari in high...
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Guest — Vusal Mammadrzayev
I agree that the subsidizes of government to agriculture sector and providing machinery and equipment can flesh out this sector. B... Read More
Wednesday, 06 June 2012 5:05 PM
Guest — Eric
Indeed, resistance to change is a big part of the problem. Learning and adoption of new "technology" (including adopting a new tim... Read More
Wednesday, 06 June 2012 10:10 PM
Guest — Juan Echanove
Dear Eric Thanks a lot for this wonderful article (as all Kahathcpuri index analysis's always are!) I full agree with every single... Read More
Friday, 08 June 2012 11:11 AM
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May
31

Lazika: Lessons from the Song Dynasty

This is a follow-up by Vladimir Popov, to the blog post Two Cities. Another perspective on whether to build a new city or not: in some papers land scarcity is seen as a factor that stimulates urbanization and industrialization. For instance, it is argued that “during the Song Dynasty, despite the fact that China lost a significant amount of arable land to invading nomads as its population peaked, China witnessed a higher urbanization level, more prosperous commerce and international trade, and an explosion of technical inventions and institutional innova...
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May
17

What Georgia Can Teach the World

A new discussion paper by Jeffrey Frankel,  via Economic Logic:  The large economies have each, in sequence, offered "models" that once seemed attractive to others but that eventually gave way to disillusionment. Small countries may have some answers. They are often better able to experiment with innovative policies and institutions and some of the results are worthy of emulation. This article gives an array of examples. Some of them come from small advanced countries: New Zealand's Inflation Targeting, Estonia's flat tax, Switze...
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Guest — Eric
In my view, Georgia is one large experiment in development reforms. What is a amazing about Georgia is that the government was abl... Read More
Saturday, 19 May 2012 10:10 AM
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