ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Jun
09

Redistribution Versus Growth: Georgia at the Crossroads

One day in my village, I saw our neighbors carrying TV sets, refrigerators, parabolic antennas, and washing machines out of their house. Soon I found out that they were hiding all that stuff from the Social Service Agency (SSA) that was about to check eligibility for social benefits. Later, when I spoke with some other villagers, it turned out that some families had even sold their cows to become eligible for social assistance. “Cows are costly and do not give income on a permanent basis”, they said. Others avoided work contracts because official em...
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Guest — Florian Biermann
Eric, two different economists wrote on the same subject. Of course, they must come to different conclusions -- otherwise, this wo... Read More
Tuesday, 10 June 2014 10:10 AM
Guest — Eric Livny
Here is what we wrote about two years ago on exactly the same subject (http://www.iset.ge/blog/?p=1171):"there are case studies sh... Read More
Monday, 09 June 2014 9:09 AM
Guest — RT
it's probably -- just a bit -- misleading to call Kuznets "a Belorussian economist" :-)
Monday, 09 June 2014 11:11 AM
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Jun
02

Pawnshop Mentality

“Jewelry you can pawn whenever you encounter financial difficulties", we were told by a friend. In our circles of acquaintances there are quite a number of people who enjoy the services of pawnshops. The reasons range from renovating apartments, paying tuition for children, and buying new hi-fi systems for the car, to repaying the 1000 lari that the 18 year-old son had lost in gambling. According to a survey of GeoStat (which accounts for all figures provided in this article), in 2013 the annual interest rate on pawnshop loans was 54,1%. For loans denomi...
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Guest — Helene Ryding
Makes microfinance look cheap doesn't it?
Monday, 02 June 2014 5:05 PM
Guest — Eric Livny
What about a typical pawnshop loan term? I would think that people use pawnshops ("lombardi") in an emergency for extremely short-... Read More
Tuesday, 03 June 2014 8:08 AM
Guest — Maya G.
You are right Eric, but in some cases "lombards" are the only source for financing HHs needs and not for only short-term. Rural po... Read More
Thursday, 12 June 2014 3:03 PM
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May
26

Discrimination in Georgia

On May 2, 2014, the Georgian parliament unanimously passed the law on the elimination of any form of discrimination. The stated objective of the law is to ensure that any physical or legal entity equally benefits from all rights defined by Georgian legislation, irrespective of race, skin color, language, sex, citizenship, place of origin, birth or residence, wealth or class status, religion or belief, national, ethnic or social belonging, profession, marital or health status, disabilities, sexual orientation, gender identity, political or other considera...
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Guest — Simon Appleby
Sometime's one man's trash is another man's treasure. Many Turkish-owned companies in Georgia preferentially employ Georgians of A... Read More
Tuesday, 27 May 2014 6:06 AM
Guest — Jeff
There is more to employment discrimination than mere stereotyping. The employer's perception that his or her customers would prefe... Read More
Tuesday, 27 May 2014 1:01 PM
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May
09

Economic Reasons for the Breakup of Georgia

In the 15th century, the Kingdom of Georgia started a painful process of disintegration from which it did not recover until the modern era, and ultimately, Georgia’s breakup at the end of the medieval age accounts for the regrettable fact that the country could not maintain its status as an independent nation (Florian Biermann and I discussed the cataclysmic Treaty of Georgievsk in our article about King Erekle II). George VIII. was the last king to rule a united Georgia for about 20 years, starting from 1446. During this period, the country’s unity was ...
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Guest — Eric Livny
A great article, Maka, many thanks! Just a couple points to add, one about the past, and another about the future.In the absence o... Read More
Friday, 09 May 2014 3:03 PM
Guest — Lasha
Unification and independence are different things. We can be unified tomorrow if we declare that we want to be part of Russia. Geo... Read More
Saturday, 10 May 2014 10:10 AM
Guest — Eric Livny
Lasha, there is no doubt that Georgia lost its independence to Russia (not in 1783, but almost 20 years later). However, the relev... Read More
Saturday, 10 May 2014 11:11 AM
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Apr
07

Do Economies Need Economists?

According to a rumor circulating among economists, there exists an econometric study which shows that the economy of a nation is doing worse the more great economists it produces. While this may be a myth, casual observation suggests that the correlation between the economic performance of a country and the quality of its economics profession is indeed unclear. The United Kingdom was home to the greatest economists of all times (Adam Smith, John Maynard Keynes, and David Ricardo, to name just a few), yet throughout great parts of the 20th century, the Br...
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Guest — Florian Biermann
No question, the role and aim of economic theory is a controversial issue. Many people will disagree with our point of view. I had... Read More
Tuesday, 08 April 2014 2:02 PM
Guest — Randy Filer
A generally good essay but I must object to one assertion. In contrast to the authors, who state "economic theory does not intend... Read More
Tuesday, 08 April 2014 1:01 AM
Guest — Eric
Given my rather limited knowledge of applied sociology, I think it has tons of predictive power concerning behavioral patterns. Be... Read More
Tuesday, 08 April 2014 3:03 PM
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Mar
10

Are Georgians Too Impatient?

Assume you have lent your brother 1000 laris, and because he is a close family member, you do not charge interest from him. One day you get a phone call from your brother, and he offers you to pay back the debt either today or in one year from now. What would you choose? If you act in line with standard economic theory, you would choose to get the money back today. You are driven by what economists call time preference, a kind of “psychological interest rate” with which you discount future payoffs. There are a couple of reasons why it makes sense for hum...
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Guest — Vano
May be that's why Georgians like to SING Many-timer?! (Mravaljamier). Somehow it reminded me what wrote prominent Georgian writer... Read More
Monday, 10 March 2014 4:04 PM
Guest — R
Unfortunately Many-timer (Mravaljamieri) became Few-timer (Cotajamieri) for Georgians.
Monday, 10 March 2014 7:07 PM
Guest — Bizbuzz
Interesting articles! I don't know, how much Georgian are impatient? But from my own short living experience in Georgia, this impa... Read More
Tuesday, 11 March 2014 12:12 AM
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