ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Jan
17

A Comparison of Unit Labor Costs in Georgia, Armenia and Azerbaijan

Wages and productivity levels differ across countries. For instance, in 2011 the average yearly income in the US was about $53 000, whilst the same indicator was $250 in Madagascar.  Clearly then, Madagascar has a competitive advantage in labor cost over the US. But the issue is not so simple because workers in the US operate in a completely different environment (with better capital facilities, more educated colleagues, higher level of technologies, etc.) that determine a much higher productivity level. Higher wages can positively affect productivi...
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Guest — NP
Some of these statements and figures would need a deeper explanation (even just to answer to the questions you are raising). For e... Read More
Thursday, 17 January 2013 10:10 AM
Guest — Giorgi Balakhashvili
While Turkey is our main trade partner, it would be very interesting to assess the ULCs compared to Turkey as well.
Thursday, 17 January 2013 11:11 AM
Guest — Giorgi Machavariani
There are different methodologies for calculating ULCs. In this investigation, they are computed as a ratio of hourly compensation... Read More
Thursday, 17 January 2013 12:12 PM
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Oct
03

Do Financial Crises Hurt Economic Recoveries?

The question of the title seems to be a rhetorical one. With the 2008 global financial crisis fresh in our minds, the logic of the vicious cycle between the economic slowdown, troubles in the banking sector, credit crunch, and the subsequent industrial decline reinforcing the credit conundrums seems quite apparent. But are the recessions accompanied by financial crises different from other brands of recessions?  And if so, how? The economists are yet to reach the ultimate verdict. And yet, this purely academic question comes to the fore of political...
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Guest — Eric
Yasya, can you give an example of a recent non-financial recession? I have a hard time recalling one...
Wednesday, 03 October 2012 10:10 PM
Guest — Yasya
Eric, you are right that in many, or perhaps nearly all cases the recessions are accompanied by a hit on the financial institution... Read More
Thursday, 04 October 2012 8:08 AM
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Sep
26

Labor Migration and Remittances to Georgia

As any other labor-exporting country, Georgia faces both the costs and benefits of migration. The main costs include human capital flight – the so-called “brain drain” – and the distortion of the age and gender structure of the population. The benefits include alleviating social pressures caused by high unemployment rates, the international experience and skills returning migrants bring back to their home countries, and, very importantly, the remittances, or money transfers, that emigrants make to their families. For many households in Georgia these mone...
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Guest — Eric
Can you explain your point? Is your emphasis on "weekly" or "correlated"?
Thursday, 27 September 2012 1:01 PM
Guest — Salome
"brain drain" and remittances are weekly correlated for Georgia
Wednesday, 26 September 2012 6:06 PM
Guest — RT
If I am not mistaken, the study we did for the GDN found that there were [almost] no remittances for investment purposes. It all w... Read More
Tuesday, 02 October 2012 7:07 PM
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Aug
30

Where is the age of discovery?

The scars of the 2008 global financial crisis, and the festering wounds of the ongoing European debt crisis seem to have obscured one simple textbook truth: long-term economic development largely depends on the growth of the total factor productivity (TFP), sometimes referred to simply as the technological progress. TFP, however, is an elusive phenomenon. This is usually the unexplained part of the output growth, the “residual” left over after we have accounted for all other known contributing factors.  Another uncomfortable truth is that technologi...
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Guest — Yasya
Eric, I completely agree, not all countries should send rovers to Mars! However, both basic (fundamental) research and the applie... Read More
Thursday, 30 August 2012 11:11 PM
Guest — Eric
Thanks for a great post, Yasya! Just curious: how do US and Germany compare on the TFP component of their growth since 1970? As fa... Read More
Thursday, 30 August 2012 3:03 PM
Guest — Eric
According the NBER paper you referenced, the US is really exceptional in that a very large portion of its growth (coded as "TFP") ... Read More
Friday, 31 August 2012 12:12 PM
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Aug
28

Georgia‘s Partnership Fund

With the recent changes in the Georgian government the Partnership Fund has received renewed attention. The fund is now head by two political heavy weights, the former Prime Minister, Nika Gilauri, and the former Minister of Finance, Dima Gvindadze. As the Messenger reports: The foundation aims to facilitate cooperation between the public and private sector, creating investment projects, jobs, attract foreign investment and generally contribute to the development of the country’s economy. The four priority sectors include energy, agriculture, industry an...
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Aug
07

Georgian Driving Manners and Economic Competitiveness

Competitiveness is an elusive term that can mean different things to different people. Moreover, there is no consensus on how a country can become competitive. For instance, South Korea’s economic breakthrough in 1960s and 1970s was arguably promoted through government-induced investment in (and protection of) particular sectors of the economy (e.g. steel, ship building and electronics) which were deemed to be potentially “competitive”. Alternatively, rather than picking winners (something bureaucrats are said to be bad at), governments could promote com...
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Guest — G.T.
Nice post, everything is so true. I just want to draw your attention to the fact that there is no part on the street where you ca... Read More
Tuesday, 07 August 2012 11:11 AM
Guest — Barrie Hebb
While it is true that there is some disagreement over what competitiveness is, how to measure it, and therefore how to improve it,... Read More
Tuesday, 25 September 2012 10:10 AM
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