ISET Economist Blog

A blog about economics in the South Caucasus.

Why Nations Fail

Over the winter holidays, I had the leisure to read the book “Why Nations Fail: The Origins of Power, Prosperity, and Poverty” by MIT economist Daron Acemoglu and Harvard political scientist James A. Robinson (Crown Business 2012, 544 pages, Hardcover $20.00). Both authors are very eminent – one would not be surprised if Acemoglu, a Turkish-born Armenian and the most frequently cited contemporary economist, would receive the Nobel Prize in economics somewhere down the road. After reading the book, I was rather disappointed, because it appeared to me as i...
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Guest — NP
Very interesting. One might argue that exclusion is now a characteristic increasingly shared not only by the Chinese communist mod... Read More
Monday, 10 February 2014 10:10 AM
Guest — LN
The idea of the theory discussed in the blog makes me optimistic too. Although, I would not agree with the author that Saakashvili... Read More
Monday, 10 February 2014 7:07 PM
Guest — Eric
Thanks for this post, Florian!Exclusive institutions, that do not allow for "create destruction" and stifle productivity and innov... Read More
Monday, 10 February 2014 9:09 PM
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The Fight of the Century

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! What was this all about? And does it have to do anything with Georgia? It does… A LACK OF DEMAND… What are the causes of recessions and unemployment? Keynes had a very clear idea about this. During a slump...
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Guest — Eric
Leqso, you may enjoy reading some of the 20th century Marxists, e.g. Rosa Luxembourg, whose analysis of capitalism going global (a... Read More
Saturday, 01 February 2014 10:10 AM
Guest — Eric
LSE is now offering an interdisciplinary MA in economics and philosophy Read More
Saturday, 01 February 2014 10:10 AM
Guest — Florian
Leqso, you say that capital outflows are not the reason for the lari depreciation. Did the imports increase also when measured in ... Read More
Monday, 03 February 2014 9:09 AM
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Georgia's Democratic Challenge

In his 1991 book “The Third Wave: Democratization in the Late Twentieth Century”, the famous American political scientist Samuel Huntington (1927-2008) identifies three global democratization waves in the history of humankind. The first wave was the creation of the classical democracies in the United Kingdom and North America and the ongoing democratization process of the 19th century in France and other European countries. The second democratization wave refers to the time after the Second World War, when some latecomers (Germany, Italy, Spain etc.), jo...
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Guest — makachitanava
Very nice post Ia, however I would like to see more discussions about Georgian case. What can be reasons for Democracy reversal i... Read More
Friday, 25 October 2013 10:10 AM
Guest — Till
It would be interesting to read a blog about how the % of Georgians describing democracy as the best political system has evolved ... Read More
Friday, 25 October 2013 11:11 AM
Guest — Jeff
Setting aside Huntington and Rustow, we may look straight to American history for a parallel. 10 years after the USA elected its ... Read More
Friday, 25 October 2013 4:04 PM
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The Voluntariness Mantra Refuted

Recently, I was made aware of an article by the famous Harvard economist Gregory N. Mankiw ("Defending the One Percent’’, The Journal of Economic Perspectives, 2013). In that article, he puts forward an interesting thought experiment. Assume we were in a state in which the market outcome would lead to absolute equality among economic agents. There was no need for redistribution, as anybody would get the same share of the pie anyway, and a lump-sum tax would finance government expenditures (which were still needed, as there is a demand for public goods). ...
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Guest — NP
Extremely interesting. If you add to this the results from a very interesting literature about poverty emphasizing how, exactly be... Read More
Monday, 16 September 2013 2:02 PM
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On “Humans” vs. “Econs”, the mystery of human psyche, and the domain of economic inquiry

You may think that the subject matter of economics is human behavior. Well, not so fast. There is a growing body of behavioral economics literature suggesting that the subject matter of mainstream economics has been behavior by “Econs”, not “Humans”. Consider this journalistic account of “Nudge”, an influential book by Richard Thaler and Cass Sunstein:  Economics has traditionally ignored psychology. In NUDGE, Richard Thaler and Cass Sunstein take a step toward greater realism about it. […] The authors start off by differentiating "Econs" from "Huma...
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Guest — Admin
Tuesday, 08 May 2012 10:10 PM
Guest — Yasya
Great post. These are the points, I believe every true scholar, every intellectual (or simply an intelligent human being) understa... Read More
Tuesday, 08 May 2012 11:11 PM
Guest — Sanjit Dhami
I will restrict myself to very brief comments. The details can be found in a valuable debate I had with Eric a few days ago; here ... Read More
Thursday, 10 May 2012 1:01 PM
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