EKONOMISTI
The international scientific and analytical, reviewed, printing and electronic journal of Paata Gugushvili Institute of Economics of Ivane Javakhishvili Tbilisi State University

DOI: 10.36172/EKONOMISTI

E ISSN 2346-8432
Print ISSN 1987-6890

Journal number 1 ∘ Ramaz Abesadze ∘

ECONOMIC REGRESS AND THE REASONS OF ITS DETECTION IN ECONOMY OF GEORGIA

Summary The concepts of "the consolidated economy" and "economic regress" introduced for the first time in economic literature are examined in the article. The essence of these concepts is revealed and sources of economic regress are established. Function of the state as "helmsman" of economy is defined. Keywords: Consolidated Economy, Economic Regress, Socialization of economy, economic developmend Introduction In market economy together with processes of economic development processes of reverse motion can proceed, i.e. regress, which during the certain period of time cannot be shown and even can promote economic growth. Regressive processes can be shown in the long-term period of time and become the reason of deep crisis. Proceeding from it, each government should observe closely these processes and take the appropriate measures for their suppression. Consolidated Economy The development of economic history shows that economy becomes dependent on more factors influencing it

Journal number 1 ∘ Rozeta Asatiani ∘

NECESSITY OF GENERAL DIRECTIONS’ (MAINSTREAM) CHANGE OF ECONOMIC POLICY IN GEORGIA

Expanded Summary First of all, the wrong economic policy is the main reason of a failure of Georgia. Therefore, the change of the main directions’ (main stream) of economic policy on the basis of increase of the uniform requirement strengthening of social orientation is necessary. It is the only way for revival of the last market. The state is a guarantor of adequacy of existing economic policy in relation to economic development of the country and features, how successfully it develops. Does such policy exist in reality if actually it is policy of closing of eyes and escaping from it? Today an inequality index in distribution of the income in Georgia - Gene's coefficient is high (0, 40-0, 41) and social stratification does not overcome any criticism. Offhand carried-out privatization in Georgia did not bring anything good to the country. If we shortly estimate the left years, the answer is unambiguous: the state adjusted "the soft glove" of the privatization, for which accel

Journal number 1 ∘ Vakhtang Burduli ∘

THE FORMATION OF ECONOMIC MECHANISMS OF ATTRACTION OF FREE FINANCIAL RESOURCES OF NATIONAL BUSINESSES TO ESTABLISH INDUSTRIES IN RELEVANT SECTORS OF THE ECONOMY

Expanded Summary At very low investment activity of domestic business in Georgia is actually pursued a course for excessive (more than necessary) attraction of foreign investment, both expedient or inappropriate. This entails a brief one-time positive macroeconomic effects (by increasing the flows of foreign currency, the number of jobs), but in the medium and long term aspects it (the excessive number of foreign enterprises) will have detrimental impact on macroeconomic parameters, will increase the country's level of poverty. After all, foreign companies will export all profits from the country in hard currency, and with the abolition of the profit tax of the enterprises the budget will be replenished weakly at the expense of their functioning (though somewhat lower will be the level of unemployment and the budget will receive income tax collected from the employees of these enterprises). The attraction of a significant scale of funding of national business

Journal number 1 ∘ Aida Guliyeva ∘ Ulviyya Rzayeva ∘

HUMAN CAPITAL AS A FACTOR OF SOLVING THE PROBLEMS CAUSED BY ECONOMIC GROWTH IN THE ECONOMIES OF DEVELOPING COUNTRIES IN THE CONTEXT OF AZERBAIJAN

Summary This article discusses one of the most important problems of this century - the limit of economic growth, considers its causes, among which are called the depletion of natural resources and environmental pollution on a background of increasing world population, also demographic models are presented. Further criteria for assessing environmental pollution are proposed by authors, the advantages and disadvantages of technological innovation are highlighted. Another aspect on which the authors focus their attention is the economy of small and developing countries, to which Azerbaijan belongs. Comprehensively considered indisputable importance of human capital for improvement of economy of the country in particular and the world economy in general, and in this perspective, the authors carried out comparative analysis of the knowledge economy of Azerbaijan with developed countries. Keywords: limit of the economic growth, demographic growth, the balance of the system, technolog

Journal number 1 ∘ Marina Muchiashvili ∘ Zamira Shonia ∘ Maia Giorgobiani ∘

FISCAL SUSTAINABILITY ANALYSIS (REPUBLIC OF GEORGIA)

Summary Fiscal policy sustainability is an important factor of the economic growth of the country. The decrease of economic growth rates in Georgia and increased fiscal deficit and state debt (both, foreign and internal) of the country in 2012-2015 (moreover, Georgia ranks first in the region with its public debt as % of GDP increase from 2012-2014), have made it actual to assess the fiscal stability of the country both, in medium-term and long-term perspectives. The analysis evidenced that by 2015, the marginal indicators of fiscal sustainability (public debt/ GDP, state debt/budget revenue and public debt/export) of Georgia remained below the thresholds. Despite this, the fiscal sustainability of Georgia may be threatened in the long-term perspective due to the different shocks (severe currency devaluation being an important factor among them), significant growth of the future social liabilities, growing scales of subsidies for different branches of economy and inc

Journal number 1 ∘ Davit Aslanishvili ∘ Kristine Omadze ∘

MONETARY CRISES IN GEORGIA: LESSONS AND PROSPECTS (1995 - 2016)

Expanded Summary Our study is the first attempt to overview the three main monetary crises in Georgia history since its independent and to study origin of the crises and evolution. The main goal of monetary policy of the sovereign country is to maintain its political and economic independence. In this regard, the cornerstone of any economic policy should be to reach stable economic growth and welfare of the population that will ensure the steady and reliable integration into the world community as a successful, progress and innovation-based state. In this regard, the economy and its main indicator - the monetary system is necessary for such asolid and predictable environment, which would be a reliable basis for further progress and development. This model is called a strong asymmetry in financial societies. This is a model of the financial system where information from the past and present is available. It has a transparent and reliable statistics based on the environment and the mo

Journal number 1 ∘ Solomon Pavliashvili ∘ Zurab Garakanidze ∘

RUSSUAN-TURKISH RELATIONS AND “GEORGIAN POWER”

Expanded Summary The article deals with the energy security problems of the region, what are the potential scenarios of the development of the region with energy resources are shown, also possible options, advantages and disadvantagesof the development of the energy transport corridor of the Caucasus and Georgia exactly are given. Why is it difficult for Turkey, like EU, to find the alternative of Russian gas is also analyzed in the article. According to the author, because of the Azerbaijan-Armenian controversy, it is difficult to get electric energy from Armenia in the East part of Turkey which is short of power. Now because of the hard relations of Russia-Turkey, Turkey will not get Russian electric energy with “Caucasus” with Akhaltsikhe-Borchkha line which A. Chubaisi dreamed when he was the Minister of Energy of Russian Federation. In such conditions in the nearest future Georgia cannot be electric energy “Hub” – the role of the specialized d

Journal number 1 ∘ Teimuraz Gogokhia ∘

THE WAYS OF IMPROVEMENT OF INNOVATIVE ACTIVITIES OF GEORGIAN FIRMS

Expanded Summary It is generally recognized the urgency and importance of innovative factor in all spheres and directions of the development of a modern economy. Both theoretical and empirical literature emphasizesthe key role and significance of innovations in economic growth and development. Implementation of innovations is the best way to achieve and maintain competitive advantages of a firm. At the same time, it is known that the increasing of firm’s productivity and efficiency may be achieved by using excess capacity or production reserves, reducing total expenses or prime cost of a product, improving management quality etc. However, it should be noted that innovative activity plays the special role within firms. The solution of the problems concerning the elaboration and implementation of effective measures of innovation-oriented firmsis especially urgent and important for countries with transition economy, including Georgia. The main goal of our research is to descri

EKONOMISTI The international scientific and analytical, reviewed, printing and electronic journal of Paata Gugushvili Institute of Economics of Ivane Javakhishvili Tbilisi State University

DOI: 10.36172/EKONOMISTI E ISSN 2346-8432 Print ISSN 1987-6890	Journal number 1 ∘ Ramaz Abesadze ∘ ECONOMIC REGRESS AND THE REASONS OF ITS DETECTION IN ECONOMY OF GEORGIA Summary The concepts of "the consolidated economy" and "economic regress" introduced for the first time in economic literature are examined in the article. The essence of these concepts is revealed and sources of economic regress are established. Function of the state as "helmsman" of economy is defined. Keywords: Consolidated Economy, Economic Regress, Socialization of economy, economic developmend Introduction In market economy together with processes of economic development processes of reverse motion can proceed, i.e. regress, which during the certain period of time cannot be shown and even can promote economic growth. Regressive processes can be shown in the long-term period of time and become the reason of deep crisis. Proceeding from it, each government should observe closely these processes and take the appropriate measures for their suppression. Consolidated Economy The development of economic history shows that economy becomes dependent on more factors influencing it Journal number 1 ∘ Rozeta Asatiani ∘ NECESSITY OF GENERAL DIRECTIONS’ (MAINSTREAM) CHANGE OF ECONOMIC POLICY IN GEORGIA Expanded Summary First of all, the wrong economic policy is the main reason of a failure of Georgia. Therefore, the change of the main directions’ (main stream) of economic policy on the basis of increase of the uniform requirement strengthening of social orientation is necessary. It is the only way for revival of the last market. The state is a guarantor of adequacy of existing economic policy in relation to economic development of the country and features, how successfully it develops. Does such policy exist in reality if actually it is policy of closing of eyes and escaping from it? Today an inequality index in distribution of the income in Georgia - Gene's coefficient is high (0, 40-0, 41) and social stratification does not overcome any criticism. Offhand carried-out privatization in Georgia did not bring anything good to the country. If we shortly estimate the left years, the answer is unambiguous: the state adjusted "the soft glove" of the privatization, for which accel Journal number 1 ∘ Vakhtang Burduli ∘ THE FORMATION OF ECONOMIC MECHANISMS OF ATTRACTION OF FREE FINANCIAL RESOURCES OF NATIONAL BUSINESSES TO ESTABLISH INDUSTRIES IN RELEVANT SECTORS OF THE ECONOMY Expanded Summary At very low investment activity of domestic business in Georgia is actually pursued a course for excessive (more than necessary) attraction of foreign investment, both expedient or inappropriate. This entails a brief one-time positive macroeconomic effects (by increasing the flows of foreign currency, the number of jobs), but in the medium and long term aspects it (the excessive number of foreign enterprises) will have detrimental impact on macroeconomic parameters, will increase the country's level of poverty. After all, foreign companies will export all profits from the country in hard currency, and with the abolition of the profit tax of the enterprises the budget will be replenished weakly at the expense of their functioning (though somewhat lower will be the level of unemployment and the budget will receive income tax collected from the employees of these enterprises). The attraction of a significant scale of funding of national business Journal number 1 ∘ Aida Guliyeva ∘ Ulviyya Rzayeva ∘ HUMAN CAPITAL AS A FACTOR OF SOLVING THE PROBLEMS CAUSED BY ECONOMIC GROWTH IN THE ECONOMIES OF DEVELOPING COUNTRIES IN THE CONTEXT OF AZERBAIJAN Summary This article discusses one of the most important problems of this century - the limit of economic growth, considers its causes, among which are called the depletion of natural resources and environmental pollution on a background of increasing world population, also demographic models are presented. Further criteria for assessing environmental pollution are proposed by authors, the advantages and disadvantages of technological innovation are highlighted. Another aspect on which the authors focus their attention is the economy of small and developing countries, to which Azerbaijan belongs. Comprehensively considered indisputable importance of human capital for improvement of economy of the country in particular and the world economy in general, and in this perspective, the authors carried out comparative analysis of the knowledge economy of Azerbaijan with developed countries. Keywords: limit of the economic growth, demographic growth, the balance of the system, technolog Journal number 1 ∘ Marina Muchiashvili ∘ Zamira Shonia ∘ Maia Giorgobiani ∘ FISCAL SUSTAINABILITY ANALYSIS (REPUBLIC OF GEORGIA) Summary Fiscal policy sustainability is an important factor of the economic growth of the country. The decrease of economic growth rates in Georgia and increased fiscal deficit and state debt (both, foreign and internal) of the country in 2012-2015 (moreover, Georgia ranks first in the region with its public debt as % of GDP increase from 2012-2014), have made it actual to assess the fiscal stability of the country both, in medium-term and long-term perspectives. The analysis evidenced that by 2015, the marginal indicators of fiscal sustainability (public debt/ GDP, state debt/budget revenue and public debt/export) of Georgia remained below the thresholds. Despite this, the fiscal sustainability of Georgia may be threatened in the long-term perspective due to the different shocks (severe currency devaluation being an important factor among them), significant growth of the future social liabilities, growing scales of subsidies for different branches of economy and inc Journal number 1 ∘ Davit Aslanishvili ∘ Kristine Omadze ∘ MONETARY CRISES IN GEORGIA: LESSONS AND PROSPECTS (1995 - 2016) Expanded Summary Our study is the first attempt to overview the three main monetary crises in Georgia history since its independent and to study origin of the crises and evolution. The main goal of monetary policy of the sovereign country is to maintain its political and economic independence. In this regard, the cornerstone of any economic policy should be to reach stable economic growth and welfare of the population that will ensure the steady and reliable integration into the world community as a successful, progress and innovation-based state. In this regard, the economy and its main indicator - the monetary system is necessary for such asolid and predictable environment, which would be a reliable basis for further progress and development. This model is called a strong asymmetry in financial societies. This is a model of the financial system where information from the past and present is available. It has a transparent and reliable statistics based on the environment and the mo Journal number 1 ∘ Solomon Pavliashvili ∘ Zurab Garakanidze ∘ RUSSUAN-TURKISH RELATIONS AND “GEORGIAN POWER” Expanded Summary The article deals with the energy security problems of the region, what are the potential scenarios of the development of the region with energy resources are shown, also possible options, advantages and disadvantagesof the development of the energy transport corridor of the Caucasus and Georgia exactly are given. Why is it difficult for Turkey, like EU, to find the alternative of Russian gas is also analyzed in the article. According to the author, because of the Azerbaijan-Armenian controversy, it is difficult to get electric energy from Armenia in the East part of Turkey which is short of power. Now because of the hard relations of Russia-Turkey, Turkey will not get Russian electric energy with “Caucasus” with Akhaltsikhe-Borchkha line which A. Chubaisi dreamed when he was the Minister of Energy of Russian Federation. In such conditions in the nearest future Georgia cannot be electric energy “Hub” – the role of the specialized d Journal number 1 ∘ Teimuraz Gogokhia ∘ THE WAYS OF IMPROVEMENT OF INNOVATIVE ACTIVITIES OF GEORGIAN FIRMS Expanded Summary It is generally recognized the urgency and importance of innovative factor in all spheres and directions of the development of a modern economy. Both theoretical and empirical literature emphasizesthe key role and significance of innovations in economic growth and development. Implementation of innovations is the best way to achieve and maintain competitive advantages of a firm. At the same time, it is known that the increasing of firm’s productivity and efficiency may be achieved by using excess capacity or production reserves, reducing total expenses or prime cost of a product, improving management quality etc. However, it should be noted that innovative activity plays the special role within firms. The solution of the problems concerning the elaboration and implementation of effective measures of innovation-oriented firmsis especially urgent and important for countries with transition economy, including Georgia. The main goal of our research is to descri