One of the current economic mysteries of the South Caucasus and the source of certain uneasiness on the part of world development organizations has been the significant rise in the recent years of the consumption to output ratio in Georgia.
The reason why such trend can be worrisome is simple. High consumption rates, including private and government consumption, imply low domestic savings. Savings, in turn, are the source of funds for capital investment, one of the important engines of future economic growth.
In an open economy the lack of domestic savin...
ISET Economist Blog
A blog about economics in the South Caucasus.
Mar
29
Mar
23
End of the week –and a fresh serving of interesting links from economist bloggers and blogging economists.
1. Joe Weisenthal from the Business Insider tells us how Ben Bernanke murdered the gold standard – and good riddance too! 2. Nice infographics from Turbotax on the history of taxes in the US. 3. Econbrowser discusses the prospects of the Eurozone crisis. 4. Michael Sandel talks about market thinking from an unusual point of view. Quite illuminating, in a way. 5. The Free Exchange blog explains (or tries to explain) ...
Mar
22
The very sharp seasonal fluctuations in the prices of many agricultural products in Georgia are indicative of the state of the Georgian agricultural sector. Agriculture provides a safety net for a very large number of jobless people who might otherwise be starving, and thus serves a very important social function. However, many of those employed in agriculture are individual subsistence farmers, lacking in skills and resources to move to the next level in terms of productivity.
Small farmers all over the world have a hard time coping with the risks inher...
Mar
21
A recent NBER working paper by Diego Comin caught my attention. The paper explores the tourism industry in Tanzania and tries to answer a few questions. The results should be taken with a grain of salt, as the methodology appears to be less watertight than in your usual NBER working paper. The sample is rather small, the data is largely self-reported, the conclusions seem rather heroic, and the paper does not appear to be embedded in a literature. Nevertheless it is highly relevant for Georgia and her tourism industry.
The paper finds that room pric...
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