The South Caucasus is divided by high mountain ranges, often impassable political borders, and ethnic conflict zones. In addition to three independent states, the region also includes three unrecognized territories. Nakhichevan is separated from Azerbaijan’s mainland by Armenia’s Syunik region. Armenia’s border with Turkey and Azerbaijan, on the other hand, is sealed for political reasons.
Though trampled by politics, the economic arguments for greater regional integration in the South Caucasus are truly powerful. For one thing, thanks to its strategic l...
ISET Economist Blog
A blog about economics in the South Caucasus.
Dec
04
Sep
25
It is no secret that global competition for the best brains is as intense as ever. Having adequate human capital can put a country on a trajectory of perpetual growth, say economists. The ‘brain wars’ typically play out in the setting of national and multinational companies competing for talent, but some of the most intense fights happen between universities struggling to recruit and retain the best young minds on the planet. Even elite institutions such as Harvard, MIT, Stanford, Oxford and Cambridge are only as good as the quality of their last ...
Jun
26
An individual living in Kutaisi took a 1500 USD real estate secured loan from one of the microfinance institutions in 2011 and had to pay 75 USD interest rate for the following 6 months. The purpose of taking this loan was to finance treatment of her child. She was unable to cover monthly payments and prolonged the term to 10 month, but failed to cover this payments again and was fined several times. In the end, loan was restructured and monthly interest raised to 83 USD, while the amount of total loan nearly doubled to 2700 USD. As a result, she ...
May
22
In economics there is a long-standing debate on whether emerging markets should adopt a fixed exchange rate currency regime or leave their exchange rates up to markets to decide. Intuitively, exchange rate is just another price, similar to the price on a sack of potatoes, a liter of milk or a kilogram of honey. Except that exchange rate is the price of 1 unit of foreign currency (say, 1 US dollar) in terms of our domestic currency. Textbook economics would tell us that price flexibility is essential for markets to function well, to quickly clear up any s...
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