ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Sep
26

Less Taxes = Higher Growth? Or not?

    Cutting taxes and achieving higher economic growth as a result is every politician’s dream. The 2016 parliamentary elections of Georgia showed just how important and controversial the question of taxation can become.  On the one hand, the Global Competitiveness Index Report that came out this month puts Georgia in the top 10 (9th place) among the countries with lowest tax rates. The current administration’s plans to abolish taxes on undistributed profit is likely to improve this ranking even more. On the other hand, many politicians a...
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Jun
25

High Wages not Walls

People who decide to leave their country and test their luck elsewhere are usually no random sample of a population. In his 1987 paper “Self-Selection and the Earnings of Immigrants” (American Economic Review 77, pp. 531-553), Harvard Political Scientist George J. Borjas discusses the so-called self-selection of migrants. As of 1987, the standard view among migration economists was that migrants, at least those who came to the United States, belonged to the “upper tails” of the income distributions in their home countries. As income reflects economic per...
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Martin Smith
Quite interesting but do you mean two minimum wages? One already in place; a second (lower} one for migrants? With a special categ... Read More
Saturday, 25 June 2016 6:06 PM
Eric Livny
No, Martin, he proposes a single minimum wage for immigrants to be set ABOVE the average wage in a host society. In this way he ho... Read More
Sunday, 26 June 2016 3:03 AM
Eric Livny
An interesting proposal, but I am not sure it really solves the problem it purports to solve. First, one has to distinguish betwee... Read More
Sunday, 26 June 2016 4:04 AM
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May
29

Universal Basic Income – a Utopian Dream that May Soon Become a Reality

Early next month, the eyes of the world will briefly turn to Switzerland. On June 5th, the citizens of this prosperous country will vote in an unprecedented referendum on the idea of guaranteeing each citizen a basic income equivalent to roughly 30,000 USD per year. At first, the idea may sound completely crazy – after all, if a basic level of income is guaranteed for everyone, why would people want to work or study to acquire a profession? Wouldn’t the entire system collapse when economic activity stops and sources of income dry up? The opinion pol...
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May
23

Georgia’s Revolutions and Economic Development: from 2004 to Present Time

Following the collapse of the Soviet Union, the Georgian nation went through a process of rapid dis-investment and de-industrialization. It was forced to shut down industrial plants, sending scrap metal abroad, and workers into subsistence farming. Hunger has never become an issue thanks to the country’s moderate climate and good soil conditions, yet inequality and associated political pressures rapidly reached catastrophic dimensions, unleashing cycles of violence, undermining the political order and inhibiting prospects of economic growth. *   &nb...
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Guest — Pratik
Thanks for an excellent summary. One quibble : I do not agree that fair distribution of resources is always an obvious trade-off a... Read More
Thursday, 26 May 2016 10:10 AM
Eric Livny
Dear Pratik, I certainly agree, to a CERTAIN EXTENT. It is easy to overshoot with free healthcare and education policies. Too much... Read More
Thursday, 26 May 2016 2:02 PM
pratik
Thanks, Eric. And I think we will agree there is a flip side too? As seen in US, where absence of universal health care system has... Read More
Friday, 27 May 2016 6:06 PM
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May
22

On Rational Procrastination

One of the most fundamental assumptions in mainstream economics is the rationality of humans. Yet, as argued by Timothy A. Pychyl, professor of psychology at Carleton University in Canada, frequently observed procrastinating behavior, i.e. the “needless voluntary delay” (Pychyl), cannot be reconciled with the rational man paradigm.  Pychyl claims in his book The Procrastinator’s Digest that procrastinators violate a most fundamental axiom of rationality, namely the so-called transitivity of preferences. If a person prefers dogs to cats and cats to h...
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Pati Mamardashvili
Very interesting review and findings. I agree that procrastination might work well for individuals. She/he can put a lot of stress... Read More
Monday, 23 May 2016 10:10 AM
Maka Chitanava
I have a comment about time pressure and different gender performances. I think results are consistent from natural selection’s po... Read More
Monday, 23 May 2016 10:10 AM
Eric Livny
Maka, but the stress-resistant males who survived have both daughters and sons, dont they? How does that square with your theory?
Monday, 23 May 2016 1:01 PM
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May
16

Georgia’s Revolutions and Economic Development: From Independence to Rose Revolution

Having just celebrated its 25th anniversary as an independent state, Georgia remains in a state of revolutionary flux. Just like a box of chocolate, this beautiful country is full of contrasting flavors, never losing the ability to surprise and fascinate at every twist and turn of its history.  Most paradoxically, while Georgia’s unprecedented reforms have become an export commodity, many Georgian reformers and revolutionaries are wanted at home for abusing the power of their office. Georgia’s laws and institutions continue to be constantly remodele...
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