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ISET Economist Blog

A blog about economics in the South Caucasus.
Apr
21

Can Georgia Develop a Knowledge-Based Economy?

A few weeks ago, the Israeli ambassador His Excellency Yuval Fuchs delivered a speech at ISET, explaining the amazing transformation of Israel from what essentially was an agricultural state into what many economists call a knowledge economy. The ambassador reported that in his youth the foremost product Israel was known for were oranges. In the last thirty years, however, Israel created a high-tech sector that can compete (and in many aspects surpasses) the high-tech industries of the United States and Europe. Over 60 Israeli companies are listed in the...
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Guest — Florian Biermann
Good salaries are not a sufficient but a necessary condition for having good teachers and professors. There is no doubt that for a... Read More
Thursday, 24 April 2014 5:05 PM
Guest — Till
My understanding is that in Western countries, teachers and schools only account for about a third of learning outcomes. Kids' hom... Read More
Thursday, 24 April 2014 1:01 PM
Guest — Florian Biermann
This is surprising news for me. I thought that, in line with the Marxian "labor theory of value", the intelligentsia was paid very... Read More
Thursday, 24 April 2014 6:06 PM
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Apr
07

Do Economies Need Economists?

According to a rumor circulating among economists, there exists an econometric study which shows that the economy of a nation is doing worse the more great economists it produces. While this may be a myth, casual observation suggests that the correlation between the economic performance of a country and the quality of its economics profession is indeed unclear. The United Kingdom was home to the greatest economists of all times (Adam Smith, John Maynard Keynes, and David Ricardo, to name just a few), yet throughout great parts of the 20th century, the Br...
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Guest — Florian Biermann
No question, the role and aim of economic theory is a controversial issue. Many people will disagree with our point of view. I had... Read More
Tuesday, 08 April 2014 2:02 PM
Guest — Randy Filer
A generally good essay but I must object to one assertion. In contrast to the authors, who state "economic theory does not intend... Read More
Tuesday, 08 April 2014 1:01 AM
Guest — Eric
Given my rather limited knowledge of applied sociology, I think it has tons of predictive power concerning behavioral patterns. Be... Read More
Tuesday, 08 April 2014 3:03 PM
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Jan
24

The Washington Consensus and Georgia

Economics Nobel Prize winner Joseph Stiglitz, well-known for sharply criticizing the conventional wisdoms of development economics, once summed up his views in a rhetorical question: “We have felt the pain, when do we get the gain?” Stiglitz wanted to point out that standard development strategies require countries to pay a high price in exchange for the promise of a better future. The price comes in form of harsh poverty for some members of the society, income reduction for many, social strain, and increased inequality. While it is obvious that the “pai...
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Guest — Florian Biermann
True, according to the Ricardo Model, every country has a comparative advantage in something. The way you put it, i.e. Georgia hav... Read More
Friday, 24 January 2014 4:04 PM
Guest — Eric
"Trade liberalization may be beneficial for a country that, unlike Georgia, enters the stage with comparative advantages in variou... Read More
Friday, 24 January 2014 2:02 PM
Guest — RT
An interesting article. Have to re-read and digest.But why are persistent current account deficits "rather unusual" for a low inco... Read More
Friday, 24 January 2014 5:05 PM
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Jan
17

No Smart Farmers in Georgia

When I think about the lack of human capital in Georgian agriculture, I am reminded of the 1997 Georgian movie “The Turtle Doves of Paradise”, directed by Goderdzi Chokheli. In a Soviet village, an ex-priest decides to teach basic knowledge to old peasants. He wants them to learn to read, write, and elementary calculations skills. The movie addresses a problem that, fortunately, has been completely eradicated in the last decades. Nowadays, virtually all people living in Georgian villages are able to read and write (and probably also to multiply, subtract...
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Guest — Eric
Great comment, Maka! Stereotypes are an important part of the story. Of course, the agricultural sector has to become much more ca... Read More
Wednesday, 22 January 2014 12:12 PM
Guest — makachitanava
"As a result, there are no incentives for young people to pick up a career in agriculture, further impeding the development of the... Read More
Monday, 20 January 2014 3:03 PM
Guest — Robizon
Very interesting point. Thank you Maka.
Tuesday, 21 January 2014 10:10 AM
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Dec
23

The Educational Choices We Make...

Like many, I like having more choice, but hate making choices. As a result, many of the most important choices in my life, including the choice among alternative partners, have been made for me by … others. A 2010 New York Times article Too Many Choices: A Problem That Can Paralyze describes the findings of an experimental study by Sheena Iyengar, a Columbia Business School professor, which suggests that the problem of choice is indeed much more complicated than the standard textbook “truth” we are teaching ISET economics students. Here is how the experi...
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Guest — Lasha
Just love Introduction. From that convincing example, it is clear that with so many options to choose from, people find it very di... Read More
Monday, 13 January 2014 7:07 PM
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Dec
02

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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