Recently, I was made aware of an article by the famous Harvard economist Gregory N. Mankiw ("Defending the One Percent’’, The Journal of Economic Perspectives, 2013). In that article, he puts forward an interesting thought experiment. Assume we were in a state in which the market outcome would lead to absolute equality among economic agents. There was no need for redistribution, as anybody would get the same share of the pie anyway, and a lump-sum tax would finance government expenditures (which were still needed, as there is a demand for public goods). ...
ISET Economist Blog
A blog about economics in the South Caucasus.
Sep
16
Sep
06
In the early 1980’s, Soviet engineers drove a prospection tunnel into Sakdrissi hillock close to the small town of Kazreti, about 50 kilometers south of Tbilisi. Much to their surprise, they discovered that the hillock already bore a labyrinth of tunnels, and, as quickly became clear, these tunnels were manmade. An old gold mine had been discovered.
25 years later, a Georgian-German team of archaeologists excavated the site and reopened the ancient entrance to the mining complex. Inside the tunnels and around the entrance they found plenty of artefacts o...
Jul
29
Recently, the Georgian authorities cracked down on Nigerian students who allegedly did not really study but used their student visas for getting access to the Georgian labor market. Yet their residence permits were withdrawn without proper verification that this suspicion was actually true. We know of a young Nigerian woman who, according to her university instructors, was studying at UG fully seriously. After three years of studies, shortly before acquiring her degree, her visa extension was denied and she had not alternative but to return to Nigeria.
T...
Jul
19
Tbilisi public transportation resembles a classic Greek tragedy. In those pieces, usually the gods interfere with human affairs and create a big mess. In Tbilisi, marshrutkas were operating in a competitive market and state intervention led to the creation of a monopoly. In Greek tragedies, once the fateful events have started, the tension increases more and more until the story reaches its climax – the showdown between the hero and his adversary. In the Tbilisi marshrutka business, the prices increase more and more and, while the quality of servi...
Jul
12
When I first started reading to my daughter I decided to buy a collection of Georgian fairy tales. However, as I started to read, I noticed that there were lots of things I did not agree with and found myself having to rephrase some of the passages as I read. I noticed that the poor are always portrayed as good characters and, no matter how they get rich (stealing from, deceiving or killing a “vicious rich giant”), social justice is assumed to have been met. I have always wondered what Natsarkekia, a lazy “ash digger”, who even after appropriating the gi...
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