ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Apr
18

On Women and Money

One of the few economists who won the Nobel Peace Prize is Muhammad Yunus, a Bangladeshi who invented the concept of microcredits. What is it about? Usually, it is very difficult for poor people to receive credits from banks. Their creditworthiness is considered low, as they have no collateral and little resources to make up for possible losses. Yunus believed, however, that poor people have good business ideas, and he did not doubt their seriousness to pay back the money. In the late 1970’s, he visited the poorest families in a Bangladeshi village calle...
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Oct
28

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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Recent Comments
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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Oct
21

Georgia on the Development Frontier: From Subsistence Agriculture to Exchange

While written in 1991, “The Development Frontier” by Peter Bauer has lost none of its relevance for Georgia and other predominantly agrarian economies of the 21st century. Economic development, suggests Bauer, “begins with the replacement of subsistence activities by production for sale. Producers will move out of subsistence production only if they see the advantages of doing so and if it is made possible for them to do so. They need the incentive, the opportunity, and the resources.” And this, according to Bauer, is where the traders come in. Traders m...
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Guest — Eric Livny
A valid point, Helene. The transfer of know-how, let alone seeds and implements, etc, is certainly not as smooth as Bauer is descr... Read More
Tuesday, 22 October 2013 10:10 AM
Guest — Helene Ryding
"Armed with knowledge of local, regional and export markets, traders also create new opportunities by providing outlets for farm p... Read More
Tuesday, 22 October 2013 9:09 AM
Guest — Juan Echanove
do agree that the improvements in roads (specially the rehabilitation of Tsalka road, which has totally modified the whole trade n... Read More
Tuesday, 22 October 2013 12:12 PM
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Oct
07

The Two Faces of Foreign Direct Investment

Recently, the Georgian media abounded with alarming reports about a slowdown of foreign direct investments (FDI) in Georgia. Indeed, economic figures seem to support the view that there may be a turn in the FDI activity. The graph shows FDI in the first two quarters of each year from 2005 to 2013. There is obviously a huge volatility in the investment activity throughout those years, reflecting economic and political events like the war and the financial crisis in 2008. Yet since 2009, FDI activity was following a slow but steady upward trend. This trend...
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Guest — RT
1. That's an interesting chart, though it may be more interesting to look at these flows in % of GDP (corresponding two quarters).... Read More
Monday, 07 October 2013 5:05 PM
Guest — Eric Livny
Quote from The Telegraph: "Steel-making giant Arcelor Mittal has suffered an extraordinary attack from a French government ministe... Read More
Monday, 07 October 2013 8:08 PM
Guest — Y
FDI can be a powerful instrument in the government's industrial policy toolkit. The idea is to 'direct' FDI in way that facilitate... Read More
Tuesday, 08 October 2013 10:10 AM
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Jul
12

American Dream vs. Georgian Dream

When I first started reading to my daughter I decided to buy a collection of Georgian fairy tales. However, as I started to read, I noticed that there were lots of things I did not agree with and found myself having to rephrase some of the passages as I read. I noticed that the poor are always portrayed as good characters and, no matter how they get rich (stealing from, deceiving or killing a “vicious rich giant”), social justice is assumed to have been met. I have always wondered what Natsarkekia, a lazy “ash digger”, who even after appropriating the gi...
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Guest — Rati
there's an interesting joke: what is the difference between American and Georgian dreams? American dream is "to become a millionai... Read More
Friday, 12 July 2013 7:07 AM
Guest — Eric Livny
Addiction to gambling is another attribute of the Georgian dream
Friday, 12 July 2013 7:07 AM
Guest — ALEX
They are leaving the country because they realize that in georgia despite talent and hard work still there is low chance to succee... Read More
Saturday, 13 July 2013 7:07 PM
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May
29

Financial Literacy in Georgia

Does Georgia have a well-developed financial sector? Certainly, proliferation of bank branches and automated teller machines in the capital city of Tbilisi might suggest that it does. And yet, the data indicates that for a country of its size, Georgia has a relatively small financial sector.  One of the measures used to approximate financial development or financial depth of the economy is the deposits to GDP ratio. According to the IMF data, this ratio in Georgia is equal to 30,8% (in 2011)- one of the lowest indicators among the economies at simil...
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Guest — Simon Appleby
The 'Lower Middle Income" countries have widely disparate financial literacies because they have wildly different recent histories... Read More
Wednesday, 29 May 2013 4:04 PM
Guest — Eric Livny
It is true that Georgia and most other transition countries do not have many years of exposure to capitalism. However, it does not... Read More
Thursday, 30 May 2013 10:10 AM
Guest — Sanjit Dhami
This is a very good post. And I think it is very important to collect such data. Many in mainstream economics would not however be... Read More
Thursday, 30 May 2013 12:12 PM
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