Far from being the root of all evil, money is one of the most spectacularly useful human inventions. On par with the technology of a wheel, the technology of money has made civilization as we know it possible. But what kind of technology does money replace?
Narayana Kocherlakota (JET 1998) argues that money is a form of memory. Here is an example: John has apples and wants bananas. Mary has oranges and wants apples. Paul has bananas but wants oranges. When John and Mary meet, John can accept money from Mary in exchange for apples and us...
ISET Economist Blog
A blog about economics in the South Caucasus.
Dec
18
Dec
14
Classical production theory knows three so called “production factors”: labor, capital, and land. One needs a certain amount of each of these factors in order to set up a production of whatever good. Then, in the 20th century, it became common to not count land as a separate production factor anymore. Today, we usually speak about labor and capital, with the understanding that some of the capital is the land on which the production facilities are built.
On the surface, this looks just like a pure change in terminology. Yet in fact it reflects an und...
Dec
11
From RFE/RL:
Cash remittances sent home by thousands of Armenians working in Russia and other countries increased by more than 23 percent in the first 10 months of this year compared to 2010, RFE/RL's Armenian Service reports.
While this sounds like unambiguously good news for Armenia, it is not. Remittances can have a very similar effect as natural resources wealth – it gives rise to what is called the Dutch Disease.
Both remittances and exports of natural resources result in an inflow of foreign currency into a country. While this ...
Dec
09
Twenty years ago, on 26 December 1991, USSR broke into 15 pieces, 15 independent states. Amid great hopes, each of these states embarked on a path of transition: from socialism, from one-party state system, from the relative security of a small city apartment, a dacha, and a Lada to… an uncertain future.
For the small Baltic pieces of the USSR puzzle, this road led to EU membership and all of the associated goodies. For many others, however, this may have been a “transition from nowhere to no place” (see the eponymous 2004 bestseller by my number one con...
Our Partners
