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ISET Economist Blog

A blog about economics in the South Caucasus.
May
10

What Can Be Achieved Through Better Education?

When speaking about unemployment, arguably the sorest problem in many market economies, “better education” is one of the standard remedies proposed by economists. This recommendation is given to rich and poor countries alike. Yet since I am in Georgia, I am increasingly skeptical about this recipe. To what extent can the education and training of people, or, to use the economic term, the accumulation of human capital, foster economic development? In Georgia, you may have studied law and you really know your trade, but there is an oversupply of lawyers, a...
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Guest — Nikita
I agree that young people’s (and their parents’) educational choices may be informed by extraneous considerations. However, I also... Read More
Friday, 11 July 2014 1:01 AM
Guest — Eric Livny
I think I tend to agree with (some of) the libertarian arguments. Of course, the oversupply of formally trained lawyers, internati... Read More
Friday, 10 May 2013 11:11 AM
Guest — Zahra
Improvements demands creativity (which were not included in Soviet education system) and hardworking (reasons of which is ambiguou... Read More
Monday, 10 February 2014 11:11 PM
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Apr
29

Fiscal Transparency

Would you like to buy in a supermarket where the supermarket owner decides what you will get for your money after you made the payment? Such a supermarket would arguably not attract many customers. Yet although this is an odd allegory, a good deal of our consumption we all make in exactly this way – and we are even forced to buy! We pay taxes to the government, and afterwards politicians decide what we get for this money. Sellers serving private customers have to deliver value for money. You won’t buy a second time in a grocery store if the food was spoi...
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Guest — Florian
If I understand you correctly, the government, assuming it is better informed than the general public, should pretend that a negat... Read More
Monday, 06 May 2013 8:08 PM
Guest — Sanjit
Good stuff Giorgi and Florian. Very clearly explained. Keep it up. A good explanation is often a good signal of good understanding... Read More
Monday, 29 April 2013 8:08 AM
Guest — Giorgi Mekerishvili
I was waiting that the author would make "citizens' lack of identification with the society" a central point as I was reading thou... Read More
Monday, 29 April 2013 10:10 AM
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Apr
23

Jobless Growth in Georgia

There is no arguing that during the ten years since the Rose Revolution, the Georgian economy registered an impressive growth performance, averaging 6.6% per annum. Summing up Georgia’s post-2004 growth experience, a recent ISET-PI study (Babych and Fuenfzig (2012)), finds it “remarkable not only in light of the 5.3 percent average growth rate in the 1995-2002 period, but also considering that the average GDP growth rate for European and Central Asian developing countries was about 5.1 percent in the period between 2003-2010.” Yet behind the gliste...
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Tuesday, 23 April 2013 8:08 PM
Guest — Eric
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Tuesday, 23 April 2013 9:09 PM
Guest — M
What is the evidence for the alleged skill mismatch? When me and Yasya were working on the growth diagnostics study we were lookin... Read More
Thursday, 25 April 2013 3:03 PM
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Apr
11

Rural Migration in Georgia to the Urban Areas: The Myth and the Truth

Please find below a chart with the population data of the 13 Georgian real urban settlements (I.e. plus than 20,000 inhabitants). As you can see, and contrary to widespread perceptions, there is no significant augmentation of the urban areas' population in Georgia in the last two decades or so. On the contrary, virtually all cities, excepting Tbilisi, saw a population decline, in many cases, with a 20% or more population lost (Kutaisi, Rustavi, Gori). the only exceptions are Zugdidi (certainly due to IDPs influx in the early 90's) and Batumi, that saw a ...
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Guest — Quji
This is interesting view. But is this chart really reliable for making such argument? Because I live in Tbilisi for about 8 years ... Read More
Thursday, 11 April 2013 4:04 PM
Guest — Andy
From a pure statistical point of view I do not agree with your results/analysis: If you aggregate the numbers of inhabitants of al... Read More
Thursday, 11 April 2013 5:05 PM
Guest — Nino
Thanks for an interesting post, Juan. There are several of points I would like to make. First, population census has not been carr... Read More
Thursday, 11 April 2013 5:05 PM
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Mar
27

Different Capitalisms

Those among our readers who happened to spend a good deal of their lifetimes in the Soviet Union may remember that there was not just one kind of socialism, but there were many different versions. For example, socialist countries favored different ways to achieve industrialization and economic progress. In China, Mao pushed for what one could call “grassroots industrialization” – villages, small towns, and urban collectives were supposed to independently set up industrial endeavors. Rice farmers started to build up manufacturing plants, factories, and ev...
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Guest — Florian
Eric, what you say exactly coincides with my observations. I was never living in England, so I do not have first-hand information.... Read More
Sunday, 31 March 2013 4:04 PM
Guest — Eric
Simon, in order to conceptualize we need to operate with "ideal" models, "ideal" types, and just philosophical ideas that may be f... Read More
Saturday, 30 March 2013 10:10 PM
Guest — Florian
Dear Simon, These are interesting points you raise. I totally agree with your frustration about the EU. There is not much good com... Read More
Sunday, 31 March 2013 4:04 PM
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Mar
22

On Social Planning, Symphonies and Cacophonies

An unprejudiced look at the Georgian economy is rather disenchanting. Starting in 1990 at a per capita income that was close to Poland’s, Georgia went into a free fall as a result of secession wars, loss of markets, an explosion of crime and corruption, and the staggering incompetency of its governments. It took Georgia 17 years, until 2007, to merely return to where it stood at the end of the Soviet Union. In these 17 years, Poland increased its output per capita by almost 700%, achieving a level of more than 25% percent of its neighbor Germany. While G...
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