Regulations apparently address problems of a society in a quick and uncomplicated way, and the call for regulations, therefore, is one of the most effective weapons in the arsenal of populists. Whether or not regulation will help to solve the problem, in any case, it creates the impression that politicians are doing something.

It is well known that government intervention, be it through taxation or regulation, can obstruct the functioning of markets. Yet there is another kind of influence that may also have strong effects on the efficiency of an economy but is much less discussed, namely the set of values, traditions, and moral standards a society subscribes to.

The value of a currency, measured in terms of other currencies, has consequences for the real economy. A more expensive lari, for example, makes it more profitable to import goods into Georgia. The importer has to pay the foreign goods with foreign currency, and when the lari is more valuable, fewer lari is needed to pay for them.

Fight of the Century? Well, that was Joe Frazier against Muhammad Ali, New York 1971, right? Wrong! For an economist, the Fight of the Century refers to the intellectual debate between the illustrious economists, John Maynard Keynes (1883-1946) and Friedrich August Hayek (1899-1992). A battle at least as hot as the boxing fight, if not even much hotter!

Last week I discussed the economic consequences of inequality. Contrary to a traditional tenet of economics, empirical research has shown that inequality may have adverse economic consequences. Inequality increases the risk of political instability in a country, posing a threat to investments due to the fact that political unrest is highly detrimental to the profits made from any economic activity.