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ISET Economist Blog

A blog about economics in the South Caucasus by ISET
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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Oct
31

To Cut or Not to Cut? Shifting Government Priorities and the Uncertain Future of Georgian Agricultural Cooperatives

“I cannot see any use [for the cooperative I have set up] if I cannot find anywhere [someone] willing to lend us money” Spanish Priest – 1908 (Cited in Garrido, S. 20071) THE GEORGIAN AGRICULTURAL SECTOR AND THE POTENTIAL ROLE OF AGRICULTURAL COOPERATIVES The Republic of Georgia was among the fastest Former Soviet Union countries to implement a large scale land reform and land redistribution plan, starting in 1992. Land redistribution resulted in the formation of hundreds of thousands of small family farms, replacing large-scale collectives and productio...
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Oct
29

Georgian Agriculture: Beacon or Red Lantern?

A question of causality: Does modernization of agriculture lead to economic growth or does growth induce a modernization of the agricultural sector? For many years, this question has been hotly debated among development economists. While those economists who believe in growth-led agriculture (GLA) were dominating until recently, now the proponents of agriculture-led growth (ALG) are afloat again. Which insights does this debate yield for Georgia? THE TRADITIONAL VIEW For a long time, the question seemed to be settled. If one asked a development economist...
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Oct
24

The Shortest Road to Strawberry Field Isn’t Always the Sweetest, or Quickest

Nino Kvirkvelia and her husband Irakli Todua are not exactly your typical Georgian smallholders. Both spouses are well-educated (both hold economics and business degrees from reputable Georgian institutions). More importantly in the context of Georgian agriculture, the couple owns 28(!) hectare of arable land in Georgia’s horticultural heaven, Samegrelo, best known for its hazelnuts. This is a fantastic amount considering that the average size of agricultural plots in Georgia is only slightly above 1ha. A natural born entrepreneur, Irakli was among the f...
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Oct
22

Back to the Future: Will an Old Farming Practice Provide a Market Niche for Georgian Farmers?

Back in ancient times, the moon was the center of everybody’s attention. People worshipped the moon and believed that it had mystical powers. Since then, the lunar effect on human mood and behavior has been an issue for psychological and astrological research. Surprisingly, many economic papers are also concerned about the influence of the lunar phases on stock returns. Yuan et al. (2006) found that stock returns (defined as the change in the value of a stock market index) are higher during the new moon period than during the full moon period. This ...
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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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