Cuba’s Fidel Castro once famously said about his country: “Even our prostitutes have university degrees”. While we don’t know about prostitutes, something similar could be said about Georgia. Virtually all Georgians have university degrees, and, as every frequent user of taxi services knows, there are Georgian taxi drivers who have two of them. Yet Georgia’s permeation with human capital is even more impressive than in Cuba, because Cubans were sent to schools by government command, while Georgians chose to become so literate just by their own moti...
ISET Economist Blog
A blog about economics in the South Caucasus.
May
02
Jan
26
Last week I discussed the economic consequences of inequality. Contrary to a traditional tenet of economics, empirical research has shown that inequality may have adverse economic consequences. Inequality increases the risk of political instability in a country, posing a threat to investments due to the fact that political unrest is highly detrimental to the profits made from any economic activity. Therefore, foreigners will bring less capital into a country when the risk of instability goes up, and even local investors will move their money over the bor...
Jan
20
Why should we care about income inequality? According to Nobel Prize laureate Joseph Stiglitz and Harvard economist Jason Furman, “greater inequality leads to more political instability, and greater political instability leads to lower growth” (“Economic Consequences of Income Inequality”, Federal Reserve Bank of Kansas: Journal Proceedings, 1998, pp. 221-232). Consequently, even if one does not care about income inequality directly, there may be reason to care about its indirect effects.
In their article "Income Distribution, Political Instability, and ...
Nov
29
Lifetime is one of the most precious assets. People are paying huge amounts of money to extend their lifespans, sometimes for gaining only weeks or months. And imprisonment and death penalty are so widely applied punishments throughout all cultures and ages because people are scared off by the prospect of losing lifetime. As lifetime is such a valuable good, it is surprising that it is largely ignored in the policy debate.
According to the World Populations Prospects report, published in 2010 by the United Nations, Georgians have a life expectancy at bir...
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