Assume you want to buy tomatoes at a vegetable market in Tbilisi. At a booth, you see beautiful tomatoes of flawless quality, red, fleshy, and shiny. Right next to them are offered semi-rotten tomatoes with corky blotches, but to your surprise, both kinds of tomatoes are tagged with the very same price. “Something wrong with this seller”, you may think and buy the shiny tomatoes.
When we speak about market failure in economics, we usually mean that the economy is in a situation in which we can make everybody better off without making anybody worse. A sta...
ISET Economist Blog
A blog about economics in the South Caucasus.
Sep
16
Sep
12
With Russia creating or helping sustain so many “frozen conflicts” on its periphery, it is crucially important for countries and nations finding themselves in this predicament to work a sound strategy of dealing with the situation. The military option has been taken off the table ever since the August 2008 attempt by Georgia to forcefully bring South Ossetia back into its fold. Thus, countries such as Moldova, Georgia and now also Ukraine, don’t have too many good alternatives to choose from. One possibility is to isolate and punish in the hope of erodin...
Sep
09
So far, many Georgians solved minor health problems in a non-bureaucratic way. Instead of consulting doctors, they asked friends, relatives, and the internet what medicine should be taken as a remedy for a given issue. Once they had received enough information, they went to a pharmacy, and, with some additional advice from the pharmacist, bought the medicine they expected to be helpful.
This practice has now come to an end. From September 2014, a large number of pharmaceuticals labeled as “second group medicines”, including painkillers and antibiotics, w...
Sep
05
When planning a debate about the impact of the new Rooms hotel on the local community in Kazbegi we expected it to be a mixed bag. A colleague who visited Kazbegi Rooms on a private reconnaissance mission told us how much he enjoyed his stay, but added: “for some reason, the relationship between the hotel and the villagers is best described as complex”. As economists, we assumed that Rooms would be a major employer of locals and so the only issue could be competition for tourists between the hotel and the local bed & breakfast providers. And as is of...
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