A new study by the ISET Policy Institute has interesting insights into Georgia’s growth performance:
This study applies the Growth Diagnostics framework and attempts to identify the binding constraints to economic growth in Georgia. While many policies potentially promote economic growth in practice only policies that relax the binding constraint do so. In contrast, policies that relax non-binding constraints will by definition do little or nothing to promote economic growth. This study builds on an existing growth diagnostics exercise b...
ISET Economist Blog
A blog about economics in the South Caucasus.
Jun
21
Jun
05
This week marks the first anniversary of the “ISET Khachapuri Index” in The Financial. During the last 12 months, our faithful readers have followed the ups and the downs of the index, and learned many economics lessons in the process.
The sharp seasonal fluctuations of the Khachapuri Index are very much reflective of the state of Georgian agriculture: fragmented, unorganized and underdeveloped. The roller coaster of agricultural production is no great fun for consumers and small Georgian farmers alike. When bringing their products to the bazari in high...
May
31
This is a follow-up by Vladimir Popov, to the blog post Two Cities.
Another perspective on whether to build a new city or not: in some papers land scarcity is seen as a factor that stimulates urbanization and industrialization. For instance, it is argued that “during the Song Dynasty, despite the fact that China lost a significant amount of arable land to invading nomads as its population peaked, China witnessed a higher urbanization level, more prosperous commerce and international trade, and an explosion of technical inventions and institutional innova...
May
23
This research paper by Tony Venables has some interesting implications for the South Caucasus:
Better integration with a resource-rich economy is extremely valuable for the resource-poor. Remote and land-locked developing countries have very limited export potential with the external world … Regional integration enables them to earn foreign exchange via their exports to the resource-rich partner. The benefits arise as the prices of these regionally traded goods are bid up, raising wages and creating a terms of trade gain for the resource poor ...
May
17
A new discussion paper by Jeffrey Frankel, via Economic Logic:
The large economies have each, in sequence, offered "models" that once seemed attractive to others but that eventually gave way to disillusionment. Small countries may have some answers. They are often better able to experiment with innovative policies and institutions and some of the results are worthy of emulation. This article gives an array of examples. Some of them come from small advanced countries: New Zealand's Inflation Targeting, Estonia's flat tax, Switze...
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