ISET’s faculty continues to prove itself on the world stage with no fewer than two papers soon to be published in international journals. Both papers were authored by Professor Muhammad Asali, a veteran member of ISET’s faculty and graduate of Colombia University; Muhammad later taught at Colombia, as well as New York University and Union College.

The first paper is to be published in The Stata Journal, and offers new methods to calculate long-run mutual effects of variables in a VAR system, as updated by the 'general-to-specific' (GETS) approach, as well as Granger causality tests among the variables. Statistical inference about long-run and cumulative effects after GETS-VAR is not straightforward, and can be cumbersome to manually code and calculate. The "vgets" command simplifies this process, providing all the necessary effects and the diagnostic tests in just one step.

The second paper will be featured in Economies of Transition, and was co-authored with Ruska Gurashvili, an ISET graduate (valedictorian of the Class of 2018) who now works at the National Bank of Georgia in its Banking Supervision Department as its leading specialist. In this research, discriminatory ethnic and gender wage gaps in Georgia were examined, which revealed that gender wage discrimination is larger than its ethnic counterpart.

The gaps were estimated in a general-to-specific vector autoregression framework to test for Granger causality between discrimination and growth, as well as to estimate the long-run effects of each variable on the other. Granger causality was found to be bidirectional, but it is only the net long-run effect of discrimination on growth that is large negative and highly significant. In the long-run, a 10 percent increase in ethnic (gender) discrimination reduces economic growth by 3-4 percent (8-10 percent).

ISET is proud of its international faculty for consistently demonstrating their quality on an international level, and proving that an institute in a small country in a largely unheard-of region can produce important economic insights.

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