ISET Economist Blog

A blog about economics in the South Caucasus.

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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When Morals Constrict the Markets

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. To some extent, the moral framework of a society is reflected in its legal system and in this way affects the economy, but more often an informal consensus that some things should or should not be done in certain ways ...
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Guest — Adam
There was a nice discussion a few years ago between Mike Munger and Russ Roberts about "euvoluntary exchange" in markets:http://ww... Read More
Friday, 14 February 2014 11:11 AM
Guest — Eric
This is not only about voluntary exchanges. How about growing weed for own consumption or using "corporal" punishment as an educat... Read More
Friday, 14 February 2014 5:05 PM
Guest — blintu
How about selling own life for money? Or selling your child as a slave? These are not allowed for the moral issues, if not that, t... Read More
Tuesday, 18 March 2014 7:07 PM
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Language and Economics

In the 1930s, the American linguist Benjamin Lee Whorf put forward the hypothesis that people of different mother tongues perceive the world differently. According to linguistic relativity or Whorfianism, both the grammatical structure and the vocabulary of a language influence the way how people think. Proponents of political correctness, aiming to ban the usage of certain words that are considered to be derogatory or discriminatory, ultimately base their ideas on Whorfianism. Saying “little person” instead of “midget” may have an impact on how one thin...
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Guest — RT
I speak that way too. Nevertheless, if you Google "მანქანა მყავს", you will see that some people argue differently.
Monday, 02 December 2013 5:05 PM
Guest — Sandro Ma
“მანქანა მყავს” (I own a car) - that's how Georgians speak. It can be explained why is that so. A car being a susbtitution to a ho... Read More
Monday, 02 December 2013 4:04 PM
Guest — RT
That norm seems to be changing. I heard once a student of mine claiming to never (!) have heard "მანქანა მყავს"
Monday, 02 December 2013 3:03 PM
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From Thieves-in-Law Towards the Rule of Law

Thomas Hobbes (1588-1679) in his Leviathan describes the conditions where “there is no place for Industry; because the fruit thereof is uncertain; and consequently no Culture of the Earth; no Navigation, nor use of the commodities that may be imported by Sea; no commodious Building; no Instruments of moving, and removing such things as require much force; no Knowledge of the face of the Earth; no account of Time; no Arts; no Letters; no Society; and which is worst of all, continual fear, and danger of violent death; And the life of man, solitary, po...
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Guest — Eric Livny
This sounds awfully complicated, dear NP. All I said is that: 1) Georgia should do a bit better in terms of eradicating corruption... Read More
Monday, 04 November 2013 3:03 PM
Guest — NP
Ok. Then you are assuming that, despite the "lower" effectiveness against crime (that you cite as a possible effect of a less arbi... Read More
Monday, 04 November 2013 3:03 PM
Guest — Eric Livny
the kind of corruption I have in mind is, for example, when the government is awarding contracts to companies owned by senior memb... Read More
Monday, 04 November 2013 12:12 PM
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The Georgian Solution to the Tragedy of the Commons

In Georgia today and in Europe in the past, villages owned pastures where every shepherd and cattle-herder in the community could take his animals. Grazing on these pastures was free and unrestricted. This land, owned by all villagers jointly, is traditionally referred to as the “commons” (in the last years, the term has been extended to also refer to free-to-use internet content). The access to common land is unregulated, and consequently the villagers utilize on this resource as much as they can. Due to the heavy overuse, the common land in villages ha...
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Guest — Charmm
Brilliant! Very interesting article interlinking ancient Georgian mythology with the fundamental principles of economics. As famou... Read More
Monday, 28 October 2013 1:01 PM
Guest — Nikoloz
" these property rights were indeed assigned, but not to villagers, but to their gods."In Khevsureti, village Roshka there is a pa... Read More
Tuesday, 29 October 2013 3:03 PM
Guest — COMUS
Very interesting article, enjoyed reading a lot! "The habit of Skoptsy men to castrate themselves may have played a role in their... Read More
Thursday, 31 October 2013 5:05 PM
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“You Merchants Are Cowards”…

In the very first class on the Principles of Economics we teach our students how beneficial trade is. We explain that voluntary exchange (trade) increases overall welfare and is mutually beneficial. Economists tend to regard this basic “principle of economics” as an axiom, providing the basis for many other principles of economics and, most importantly, the notion (or fallacy) that “the markets know best”… Perhaps paradoxically, despite the many beneficial features of trade, merchants (i.e. professional traders), rarely enjoy social esteem. One reason fo...
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