Many countries in the world run their public pension systems under the so called pay-as-you-go (PAYG) scheme, where pensioners receive their money from those who are currently working. The transfers are made through separate obligatory contributions to the pension system or through general taxes. Unfortunately but predictably, in the last decades the shrinking and ageing populations caused severe problems for PAYG systems, both in advanced as well as in less developed countries. An inevitable consequence of people living longer and fertility rates going ...
ISET Economist Blog
A blog about economics in the South Caucasus.
Apr
05
Apr
02
When economists discuss the constraints for economic development of a country like Georgia, one thing is always taken as given: That people have enough to eat. Of course there are people in this country who are suffering from hunger and malnutrition, but these are rather exceptional outgrowths of extreme poverty. By and large, Georgians have enough money in their pockets to buy bread, vegetables, meat, and dairy products at street vendors, at local food markets, or even at super markets. The fact that hunger was overcome in Georgia and many other regions...
Mar
27
Those among our readers who happened to spend a good deal of their lifetimes in the Soviet Union may remember that there was not just one kind of socialism, but there were many different versions. For example, socialist countries favored different ways to achieve industrialization and economic progress. In China, Mao pushed for what one could call “grassroots industrialization” – villages, small towns, and urban collectives were supposed to independently set up industrial endeavors. Rice farmers started to build up manufacturing plants, factories, and ev...
Mar
22
An unprejudiced look at the Georgian economy is rather disenchanting. Starting in 1990 at a per capita income that was close to Poland’s, Georgia went into a free fall as a result of secession wars, loss of markets, an explosion of crime and corruption, and the staggering incompetency of its governments. It took Georgia 17 years, until 2007, to merely return to where it stood at the end of the Soviet Union. In these 17 years, Poland increased its output per capita by almost 700%, achieving a level of more than 25% percent of its neighbor Germany.
While G...
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