Fight of the Century? Well, that was Joe Frazier against Muhammad Ali, New York 1971, right? Wrong! For an economist, the Fight of the Century refers to the intellectual debate between the illustrious economists John Maynard Keynes (1883-1946) and Friedrich August Hayek (1899-1992). A battle at least as hot as the boxing fight, if not even much hotter!
What was this all about? And does it have to do anything with Georgia? It does…
A LACK OF DEMAND…
What are the causes of recessions and unemployment? Keynes had a very clear idea about this. During a slump...
ISET Economist Blog
A blog about economics in the South Caucasus.
Jan
31
Dec
13
For many observers, the Georgian job market is a mystery. Companies are bitterly complaining about a lack of engineers, forcing them to withhold the expansion of production capacities and to cut down investments. Yet Georgian young people, who could make good fortunes by studying technical subjects, prefer to learn law, business administration and the like, qualifications that are oversupplied in the market and on average do not yield high salaries.
Young Georgians, lacking information on what sells well in the job market, apply a simple decision rule ca...
Dec
06
One or two years ago, a Lavazza’s take-away coffee shop opened on the side of Georgia’s east-west highway in the area of Zestaponi. You always could find plenty of coffee shops in Tbilisi, but it was a novelty to have them next to the highway. Soon afterwards, another coffee bar opened along the road, and surprisingly, it was again set up close to Zestaponi. And today, there are even more take-away coffee points along that road, and they all cluster at Zestaponi.
Travelling from Tbilisi to Kutaisi or Batumi, you will notice other such clusters. You can b...
Nov
18
In our last week’s article we examined Georgia’s economic growth in the 12 months before the 2012 parliamentary elections. In particular, we reviewed the popular argument that much of this economic growth was driven by the “political business cycle” effect of public (over)spending prior to the elections.
Our analysis showed that the construction sector (the prime suspect for politically motivated spending) did in fact exhibit an atypical growth pattern just before the elections, and that growth rates in construction collapsed right after October 20...
Nov
10
October 27, 2013 heralded a new era in the Georgian politics. The year of power sharing between the two main rival political forces, the so-called “era of cohabitation”, has officially ended, and we can now start to look back and take the stock of how the political developments in the country affected economic growth.
In two articles that we publish today and in the next week, we will aim to provide an overview of some specific trends. We will first look at the general economic trends in the year between the parliamentary and the presidential elections (...
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