ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Mar
05

Coordination Games

Some years ago my dad, who is an avid blogger, wrote a piece about a plague of disorderly advertising that was chocking Kyiv. Notices promoting everything under the sun were plastered on the walls, fences, lamp-posts, in metro cars, on the bus stops, even on the pavement. Our own building’s entrance was a sad sight - always covered with debris of paper and glue. Our neighbor, and elderly lady, laboured heroically to wash off the wall and the door frame every now and then, but it was a Sisyphean task.  The clean wall only served as a magnet for ...
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Nino Doghonadze
It is so encouraging to see how smart common men defeat the unpleasant dominant strategies, prevalent in the society!
Monday, 07 March 2016 9:09 AM
Eric Livny
There is certainly a coordination problem - and its solution - in the first example (that of Yasyas father). The dog poo is also a... Read More
Monday, 07 March 2016 9:09 PM
Eric Livny
Problems of the commons represent coordination failures, according to your own (standard) definition, Sanjit:A. There are multiple... Read More
Tuesday, 08 March 2016 3:03 AM
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Feb
14

Europe’s Dramatic Monetary Failure

This week, another crazy idea haunted economically faltering Europe. According to the plans of European politicians, the 500 euro note will disappear and cash payments above 5,000 euro will be made illegal. Officially a measure against money laundering, the pretext was correctly debunked by Hans-Werner Sinn in the Frankfurter Allgemeine Zeitung: the true reasons for this step is to push interest rates further down. Big notes allow to store wealth in cash, and if that is not possible anymore, interest rates can be brought even further into the negative, d...
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Florian Biermann
Dear Simon,I agree that an alternative way to get the money into circulation would be to give tax credits. Maybe the better way, t... Read More
Monday, 15 February 2016 6:06 PM
Simon Appleby
The 2008/9 "stimulus" in Australia involved mailing every household in the country a checque for $1000, to stimulate household con... Read More
Sunday, 14 February 2016 7:07 AM
Florian Biermann
Dear Norberto, you want to give the extra money to governments, not to people. Yet, governments already soak up way too many of th... Read More
Monday, 15 February 2016 6:06 PM
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Jan
18

Men Are Rational, Women Are Adaptive?

INSIGHTS FROM GEORGIA’S CONSUMER CONFIDENCE INDEX For over three and a half years, the ISET Policy Institute has been tracing the trends in the Georgian consumer sentiments. Every month a team of callers dial randomly generated telephone numbers to interview around 330 people from all over Georgia. The interviewer first asks the basic questions about the respondent’s age, level of education, place of residence, and then follows up with questions about the current financial situation of the household and the person’s expectations about the future economic...
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Oct
25

Borrow in Dollar or Lari? That Is the Question!

The Georgian lari’s depreciation against the dollar has been a pressing issue for everyone: economists and policymakers, students, housewives and even the good-for-nothing “birzhavik’s”. The weaker lari may be good news for Georgia’s export competitiveness and trade balance, yet it also pushes up the prices of anything we import. This may include some luxury items we can do without, but also many things that are absolutely essential for the Georgian economy: primary commodities, production inputs and machinery, foodstuffs and medicines. And by raising th...
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Guest — StephanvonCramonUniversityofGttingenandGermanEconomicTeamGETinGeorgia
Interesting, thank you. However, perhaps it should be stated very clearly: if you earn your income in lari, borrowing in dollars m... Read More
Sunday, 25 October 2015 8:08 PM
Eric Livny
Yes, I agree with Stephan that borrowing in foreign currency is ultimately a gamble.But agree with Giorgi that this may be a gambl... Read More
Monday, 26 October 2015 9:09 AM
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Sep
18

Confidence Matters!

Georgian consumer confidence suffered a major blow at the end of 2014, in the wake of the sharp Lari depreciation. Around February 2015, the Index found some support at the very low level of -35-30 points, and has been slightly improving since then. In July 2015, this mildly positive trend was reversed, and in August, the Index dropped another 4.1 points to reach a new historical minimum of -38.4 points. Interestingly, this entire drop was driven by older respondents, those aged over 35. We will come back to this point later in the article. At the same ...
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Sep
14

Georgia’s Currency is Much More Than the GEL/USD Exchange Rate

It is easy to understand what it means for an economy to be weak or strong. We know that a strong economy is characterized by low unemployment and high growth rates. Other desirable traits are, for example, low levels of poverty and income inequality, when all citizens enjoy reasonable standards of living.  Things are less clear when we think about our national currencies.  When designating currencies as “weak” or “strong”, we usually think of the exchange rate against the dollar or the euro. Having a “weak” currency sounds like a bad thing, wh...
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Guest — Chase
I agree with Yasya that it wouldn't be the most advantageous. To add to the argument, I interviewed Matthias Matthijs of Johns Hop... Read More
Wednesday, 16 September 2015 10:10 AM
Guest — Yasya
As far as currency is concerned I am of the opinion that adopting either USD or Euro may not have clear advantages for Georgia. Th... Read More
Tuesday, 15 September 2015 6:06 PM
Guest — JanFidrmuc
Good article. I wonder if dollarization (or euroization) might be the way forward, either by completely replacing the lari in circ... Read More
Tuesday, 15 September 2015 2:02 PM
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