Since some years, Azerbaijan experiences an immigration wave. Chart 1 shows the net immigration (immigration minus emigration) to Azerbaijan during the last 22 years. As can be seen, in every year since 2008 more people are immigrating to Azerbaijan than there are emigrating. In 2012, for instance, 2000 net migrants came to Azerbaijan.
Migration flows are governed by economic, social, and political motives. One may categorize these to be either pull factors or push factors. Push factors are typically the lack of economic opportunities in the countries of...
ISET Economist Blog
A blog about economics in the South Caucasus.
Feb
06
Feb
03
The value of a currency, measured in terms of other currencies, has consequences for the real economy. A more expensive lari, for example, makes it more profitable to import goods into Georgia. The importer has to pay the foreign goods with foreign currency, and when the lari is more valuable, less lari are needed to pay for them. Driven by competition, importing companies will forward some of this cost reduction to the consumers and charge lower prices for imported goods.
At the same time, an appreciation of the lari puts a burden on exporters. A bottle...
Jan
31
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...
Jan
26
Last week I discussed the economic consequences of inequality. Contrary to a traditional tenet of economics, empirical research has shown that inequality may have adverse economic consequences. Inequality increases the risk of political instability in a country, posing a threat to investments due to the fact that political unrest is highly detrimental to the profits made from any economic activity. Therefore, foreigners will bring less capital into a country when the risk of instability goes up, and even local investors will move their money over the bor...
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