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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Nov
05

Lock, Stock and Two Smoking Barrels

“All the evidence shows that God was actually quite a gambler, and the universe is a great casino, where dice are thrown, and roulette wheels spin on every occasion. Over a large number of bets, the odds even out and we can make predictions; that's why casino owners are so rich. But over a very small number of rolls of the dice, the uncertainty principle is very important” – Stephen Hawking. Casinos, totalizators, and other gambling institutions are very popular in Georgia. According to the study “Gambling in Georgia – Second Report,” conducted by Transp...
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Eric Livny
I am very glad you managed to survive, Giorgi, and write this very important article! Beyond the three smart policy options you ... Read More
Monday, 07 November 2016 1:01 PM
Giorgi Vashakidze
Hi
Monday, 07 November 2016 6:06 PM
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Oct
19

ISET Consumer Confidence: Anticipation Beats Realization

The CCI, which is computed by ISET-PI on a monthly basis, monitors how Georgians feel about their personal financial situations and the economic well-being of the whole country. Roughly speaking, the index is computed as the difference between the frequencies of positive and negative answers to 12 questions covering the present and expected economic situations of the households surveyed, as well as general economic parameters of the country, such as inflation and unemployment. It ranges from −100, a result that would follow if all respondents answered al...
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Sep
06

Homo Economicus Sisyphus

In the last two decades, happiness has moved into the focus of economic inquiry. Frey and Stutzer (“What can Economists Learn from Happiness Research”, Journal of Economic Literature 20, 2002, pp. 402-435) argue convincingly that gross domestic product (GDP), unemployment, inflation, and many other indicators of economic performance are primarily interesting because they are correlated with the well-being of people. Without the assumption that these parameters are proxies for happiness, there would be no reason to pursue economic policies that maximize i...
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Guest — MartinSmith
A beautiful piece of explanation. Since four years... is not said: for the last four years is how this clause should read. I wil... Read More
Thursday, 08 September 2016 1:01 AM
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Jun
20

MINDSPACE: a New Way to Influence Behavior through Public Policy

WHEN SUCCESS SPEAKS TOO LOUDLY In November 2015, the National Audit Office of the UK has published a report saying: “The Department for Work and Pensions has successfully introduced automatic enrolment to workplace pensions for large and medium-sized employers.” The National Audit Office found that 58,000 employers have enrolled 5.4 million workers between October 2012 and August 2015. The huge increase in enrolment was due to a small policy change introduced by the UK government in October 2012. The Government switched the default option from one i...
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Salome Deisadze
This is completely innovative way to re-think about government policy. It has been thought that the main instruments of government... Read More
Monday, 20 June 2016 9:09 AM
Martin Smith
Magnificent. I pasted out the charts. Obviously, the UK idea is groundbreaking and can hardly be applied in Georgia....although it... Read More
Wednesday, 22 June 2016 1:01 PM
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Jun
13

The Economics of Boasting

WHO BOASTS, AND WHY? As argued by Omer Moav and Zvika Neeman in a 2012 paper (Moav taught at ISET in the past), boasting is a way to pretend that one has hidden income (“Saving Rates and Poverty: The Role of Conspicuous Consumption and Human Capital”, Economic Journal 122, pp. 933-956). While people may have a rough idea of the incomes of their neighbors, colleagues, friends, and other people they interact with, they usually do not know exactly how much they make. Hence, there is some wiggle room for speculation, and if one sees a colleague coming to wor...
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Guest — megiddo02
Randy, do you want to suggest that the $300 per capita GDP are highly inaccurate and the true income is much higher?
Monday, 18 May 2015 5:05 PM
Guest — Randy
A more obvious explanation may be that this is even more evidence that reported Georgian incomes are meaningless, as anyone lookin... Read More
Monday, 18 May 2015 5:05 PM
Guest — Sanjit Dhami
All very plausible; the examples from evolution are persuasive and might well apply to humans too. However, poor countries also ha... Read More
Monday, 18 May 2015 7:07 PM
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