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ISET Economist Blog

A blog about economics in the South Caucasus by ISET
Oct
17

Khachapuri Index, Exchange Rate Dynamics and International Tourism

One glance at the ₾Khachapuri Index chart (for locals) tells the whole story of Georgian agriculture. Left to fend for themselves during the cold winter months, Georgian cows produce very little milk, sending dairy prices through the roof. Conversely, milk production peaks with the arrival of sunny weather and green fodders in early spring, leading to a collapse of milk prices. In the absence of large-scale industrial milk production (that does not depend as much on climate and weather conditions), the roller coaster image repeats itself, year in and yea...
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Oct
03

Breathing in Tbilisi

Tempelhofer Feld is a beloved communal recreation area of Berliners. Tempelhofer Feld is not just a park. It is a park built instead of an airport. In 2008, when the almost century old Tempelhofer airport was closed, the city of Berlin declared the centrally located, 386-hectare (!) open space for public use. Today, the area has a six-kilometer cycling, skating and jogging trail, a 2.5-hectare barbeque area, a dog-walking field covering around four hectares, and an enormous picnic area for visitors – everything we, Tbilisi citizens, can only dream of. Ju...
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Oct
03

On Predicting Election Results

  Forecasters, professionals and amateurs alike, all got it wrong. The Brexit came as a surprise because the bookmakers (people who organize bets on developments in politics, economics, and sports) reported that about three times more money was put on the event that Britain would stay in the EU than on its alternative. With poll results being inconclusive in the weeks before the referendum, this led many pundits to believe that Britain would stay in the EU. Also in the United States, the predictors were dramatically embarrassed when Donald Trump pr...
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Sep
27

Jobs for Life in Georgian Universities?

Few may have noticed an amendment to the Georgian Law on Higher Education, passed in December 2015, which potentially ushers in a new era for Georgia’s higher education system. As of January 2017, (some) Georgian professors and senior research staff will be appointed for an indefinite term (i.e. given "tenure"). Offered decent compensation and protected from political pressures and job insecurity, they will be able to indulge in academic endeavors, nurturing a new generation of Georgian academics and promoting Georgian science onto the global scene. This...
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Sep
26

Less Taxes = Higher Growth? Or not?

    Cutting taxes and achieving higher economic growth as a result is every politician’s dream. The 2016 parliamentary elections of Georgia showed just how important and controversial the question of taxation can become.  On the one hand, the Global Competitiveness Index Report that came out this month puts Georgia in the top 10 (9th place) among the countries with lowest tax rates. The current administration’s plans to abolish taxes on undistributed profit is likely to improve this ranking even more. On the other hand, many politicians a...
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Sep
20

ISET’s Consumer Confidence Index Shoots through the Roof

In September 2016, ISET’s Consumer Confidence Index added 13 points, the single largest monthly increase in the Index since its launch more than 4 years ago. Having risen from -28.7 to -15.7 points, the CCI rebounded to levels we have last observed about two years ago, in fall 2014 (i.e. at the outset of the GEL devaluation drama). Both the Expectations and Present Situation components of the CCI soared (up by 11.1 and 14.9 points, respectively), breaking historical records for monthly increases. On the one hand, the latest improvement in the CCI extends...
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