ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Oct
21

Georgia on the Development Frontier: From Subsistence Agriculture to Exchange

While written in 1991, “The Development Frontier” by Peter Bauer has lost none of its relevance for Georgia and other predominantly agrarian economies of the 21st century. Economic development, suggests Bauer, “begins with the replacement of subsistence activities by production for sale. Producers will move out of subsistence production only if they see the advantages of doing so and if it is made possible for them to do so. They need the incentive, the opportunity, and the resources.” And this, according to Bauer, is where the traders come in. Traders m...
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Guest — Helene Ryding
"Armed with knowledge of local, regional and export markets, traders also create new opportunities by providing outlets for farm p... Read More
Tuesday, 22 October 2013 9:09 AM
Guest — Eric Livny
A valid point, Helene. The transfer of know-how, let alone seeds and implements, etc, is certainly not as smooth as Bauer is descr... Read More
Tuesday, 22 October 2013 10:10 AM
Guest — Juan Echanove
do agree that the improvements in roads (specially the rehabilitation of Tsalka road, which has totally modified the whole trade n... Read More
Tuesday, 22 October 2013 12:12 PM
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Oct
07

The Two Faces of Foreign Direct Investment

Recently, the Georgian media abounded with alarming reports about a slowdown of foreign direct investments (FDI) in Georgia. Indeed, economic figures seem to support the view that there may be a turn in the FDI activity. The graph shows FDI in the first two quarters of each year from 2005 to 2013. There is obviously a huge volatility in the investment activity throughout those years, reflecting economic and political events like the war and the financial crisis in 2008. Yet since 2009, FDI activity was following a slow but steady upward trend. This trend...
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Guest — RT
1. That's an interesting chart, though it may be more interesting to look at these flows in % of GDP (corresponding two quarters).... Read More
Monday, 07 October 2013 5:05 PM
Guest — Eric Livny
Quote from The Telegraph: "Steel-making giant Arcelor Mittal has suffered an extraordinary attack from a French government ministe... Read More
Monday, 07 October 2013 8:08 PM
Guest — Y
FDI can be a powerful instrument in the government's industrial policy toolkit. The idea is to 'direct' FDI in way that facilitate... Read More
Tuesday, 08 October 2013 10:10 AM
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Jul
12

American Dream vs. Georgian Dream

When I first started reading to my daughter I decided to buy a collection of Georgian fairy tales. However, as I started to read, I noticed that there were lots of things I did not agree with and found myself having to rephrase some of the passages as I read. I noticed that the poor are always portrayed as good characters and, no matter how they get rich (stealing from, deceiving or killing a “vicious rich giant”), social justice is assumed to have been met. I have always wondered what Natsarkekia, a lazy “ash digger”, who even after appropriating the gi...
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Guest — Rati
there's an interesting joke: what is the difference between American and Georgian dreams? American dream is "to become a millionai... Read More
Friday, 12 July 2013 7:07 AM
Guest — Eric Livny
Addiction to gambling is another attribute of the Georgian dream
Friday, 12 July 2013 7:07 AM
Guest — Giorgi
I think the "Natsarkekia" syndrome is temporary. From my personal observations people start to realize that only by hard working t... Read More
Friday, 12 July 2013 8:08 AM
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May
29

Financial Literacy in Georgia

Does Georgia have a well-developed financial sector? Certainly, proliferation of bank branches and automated teller machines in the capital city of Tbilisi might suggest that it does. And yet, the data indicates that for a country of its size, Georgia has a relatively small financial sector.  One of the measures used to approximate financial development or financial depth of the economy is the deposits to GDP ratio. According to the IMF data, this ratio in Georgia is equal to 30,8% (in 2011)- one of the lowest indicators among the economies at simil...
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Guest — Simon Appleby
The 'Lower Middle Income" countries have widely disparate financial literacies because they have wildly different recent histories... Read More
Wednesday, 29 May 2013 4:04 PM
Guest — Eric Livny
It is true that Georgia and most other transition countries do not have many years of exposure to capitalism. However, it does not... Read More
Thursday, 30 May 2013 10:10 AM
Guest — Sanjit Dhami
This is a very good post. And I think it is very important to collect such data. Many in mainstream economics would not however be... Read More
Thursday, 30 May 2013 12:12 PM
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Apr
09

The Gender Pay Gap

Large gaps exist between male and female wages across the world. Eurostat data about the unadjusted Gender Pay Gap (GPG) represent the difference between average gross hourly earnings of male and female paid employees as a percentage of average gross hourly earnings of male paid employees. In 2011, in the EU, women earned 16.2 percent less per hour compared to men.  The difference varies from 2.3% for Slovenia till 27.3 % for Estonia. The Worldbank Development Report on Gender Equality analyzed data of sixty-four developing and developed countries a...
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Guest — Neal Zupancic
I think you should take a look at the way Western economists actually explain the wage gap. Contrary to what you have said here, ... Read More
Tuesday, 09 April 2013 11:11 PM
Guest — Eric
The main (and only) point of the article is that the gender pay gap is not caused by discrimination but rather by the difference i... Read More
Wednesday, 10 April 2013 12:12 AM
Guest — Neal Zupancic
I too would be concerned if women were forcefully subjected to a radical experiment in communism conducted by small Israeli farmin... Read More
Wednesday, 10 April 2013 8:08 AM
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Mar
15

Are Good Times Good for Georgian Women?

On the 8th of March, Georgia joined many other countries around the world in celebrating the International Women’s Day. While this particular way of appreciating the many contributions of the Georgian women may be said to have been inherited from the Soviet Union, women have historically played very important roles in Georgian society and politics. The most prominent among them were Medea of Colchis, St. Nino, who brought orthodox Christianity to our country, and “King” Tamar, who ruled the state in its “Golden Age“. It was during this “Golden Age“, as e...
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Guest — Florian
I find the figure that the average female wage in Georgia amounts to just 60% of the average male wage quite confusing. How does t... Read More
Saturday, 16 March 2013 12:12 AM
Guest — RT
Sorry, what important role did Medea of Colchis play in society and politics?
Saturday, 16 March 2013 11:11 AM
Guest — Eric
Medea from Colchis facilitated Georgia's integration in the global economy!
Saturday, 16 March 2013 9:09 PM
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