Journal N3, 2025 content

journal N3 2025 შინაარსი - C O N T E N T S აკადემიკოსი პაატა გუგუშვილი - 120 9 რეგიონული ეკონომიკა–REGIONAL ECONOMY Vakhtang Burduli - The state of formation of the innovative economy in Georgia’s regions and the existing economic difficulties 17 ვახტანგ ბურდული – რეგიონებში ინოვაციური ეკონომიკის ფორმირების მდგომარეობა და არსებული ეკონომიკური სურთულეები (რეზიუმე) 31 მაკროეკონომიკა – MACROECONOMICS მალხაზ ჩიქობავა, ნაზირა კაკულია, თეა
2025-09-10

Journal number 3 ∘ Vakhtang Burduli ∘

The state of formation of innovative economy in the regions of Georgia and existing economic difficulties

journal N3 2025 DOI : 10.52340/ekonomisti.2025.03.01 Annotation. The article presents some elements of the classification of types of innovations, as well as mechanisms for coordinating the dissemination of innovations. Some main directions of implementing innovations in the modern period are considered. Further, the state of coordination of the formation of an innovative economy by the Agency of Innovation and Technology of Georgia, as well as the state of dissemination of basic innovative technologies in the regions of Georgia are considered, some difficulties are identified and ways to overcome them are outlined. The regional components of the formation of the innovative economy of Georgia are systematized and the state of their use in the regions is shown. The last section examines the existing economic difficulties in the formation of the innovative economy and some ways to overcome them. Key words: diffusion of innovations, basic, improving and pseudo-innovations, innovation
2025-09-10

Journal number 3 ∘ Malkhaz Chikobava ∘ Nazira Kakulia ∘ Tea Lazarashvili ∘

Debate on the Basic Principles of Modern Monetary Theory

journal N3 2025 DOI: 10.52340/ekonomisti.2025.03.02 Abstract: The conceptual and analytical framework of Modern Monetary Theory (MMT) is based on the principles of functional finance and the theory of money known as Chartism. When applied to specific macroeconomic analysis, it is based on prevailing institutional practices. Typically, these methods assume constraints on the behavior of the central bank and/or the treasury imposed by political and ideological processes, which are often mistakenly interpreted as substantive (involuntary) constraints. MMT removes this ideological veil, revealing the inner workings of modern monetary economies. This paper attempts to provide an MMT-based response to the orthodox critics of the basic assumptions of MMT. It also presents some key insights developed by MMT that will help students (and others) rethink their knowledge of the functioning of modern advanced capitalist economies. It should be emphasized that these ideas are not unique to
2025-09-10

Journal number 3 ∘ Giorgi Kepuladze ∘ Tamila Arnania-Kepuladze ∘

Japanese Keynesianism and the Peculiarities of Its Evolution

journal N3 2025 DOI: 10.52340/ekonomisti.2025.03.03 Abstract The 20th century was a period of profound transformations for Japan, which affected both the country\\\'s socio-economic life and the process of its understanding and reassessment. Since the beginning of the 20th century, Japan has gone through a complex and contradictory path from industrialisation at the beginning of the century to the "economic miracle" of the post-war period, to the structural crisis and depression of the 1990s, followed by the formation of a dynamically developing high-tech innovative economy. These processes were accompanied by the intensive development of economic science. Japanese economic thought absorbed both Western economic theories and traditional Eastern approaches and, on this basis, formed a unique theoretical space that influenced the country\\\'s domestic policy and international science as well. In modern Japanese economic science, four main trends can be distinguished:
2025-09-10

Journal number 3 ∘ Zurab Garakanidze ∘

The role of the “Zangezur Corridor” in Georgias transport and communication security

journal N3 2025 DOI: 10.52340/ekonomisti.2025.03.04 Summary The main supporters of the Zangezur Corridor (TRIPP) discussed in the article are the US, Armenian, Azerbaijani administrations and the Pan-Turkic forces of Turkey, which are trying to expand their influence in the Caspian Sea region, Central Asia and even on the projects of China’s “Belt and Road Initiative”. They rely on the points of the agreement that provide for: 1) unblocking economic and transport links in the region; 2) ensuring transport links between the western regions of Azerbaijan and Nakhchivan by Armenia along the banks of the Araks River; 3) construction of new transport links between Nakhchivan and other regions of Azerbaijan. Therefore, their statements about TRIPP as an alternative to the Georgia-EU Caspian hydrocarbons western “corridor” are unclear. For example, in Forbes, July 18, 2025, in an article titled “America’s Growing Influence on the Zangezur: How a
2025-09-10

Journal number 3 ∘ Rusudan Papaskiri ∘

Assessment of the State Mechanism for Regulating Construction Companies in Georgia

journal N3 2025 DOI: 10.52340/ekonomisti.2025.03.05 Expanded Summary The paper examines the state mechanism for regulating the construction business in Georgia and evaluates its effectiveness. The purpose of the article is to study and analyze fiscal and regulatory instruments through which the state influences the construction business, such as antitrust and tax legislation, state loans, subsidies, and credit rates. The theoretical and methodological basis of the research includes existing Georgian legislation, data from the National Statistics Office of Georgia, the Ministry of Finance of Georgia, and the Central Banks of Georgia and Estonia. The study also uses an overview of economic theories related to business, as well as comparative research. The construction business is one of the most profitable sectors, which is why both local and foreign real investments are primarily directed toward it. In market
2025-09-10

Journal number 3 ∘ Tengiz Verulava ∘ Lasha Khurtsidze ∘

Strategic challenges and development prospects of sales management in the Georgian insurance industry

journal N3 2025 DOI: 10.52340/ekonomisti.2025.03.06 Expanded Summary The insurance sector in Georgia represents a vital and growing component of the national economy, yet it continues to face significant structural and managerial challenges, particularly in the domain of sales management. This study aims to explore the systemic issues hindering the development of effective sales strategies in Georgian insurance companies, focusing on organizational constraints, technological gaps, limited digital transformation, and the insufficient integration of customer-oriented approaches. Sales management is not merely the process of offering a product or service; it constitutes a complex, multidimensional system grounded in managerial structures, technological infrastructure, and human resource capacity. Theoretical literature confirms that the structure and processes of sales management are closely linked to an organization’s overarching strategy and customer-focused philosophy, which
2025-09-10

Journal number 3 ∘ J.S. Mirzabekova ∘

ASSESSING THE IMPACT OF THE EDUCATION SECTOR ON THE ECONOMIC DEVELOPMENT OF THE COUNTRY

journal N3 2025 DOI: 10.52340/ekonomisti.2025.03.07 Abstract: The article “Assessment of the impact of the education sector on the economic development of the country” examines the assessment of the impact of the education sector on the economic development of the country. It has been shown that education is a continuous process that promotes the development of psychological, social, and physical aspects of human development. Changes in the education system will contribute to increasing the efficiency of using the human factor, changing its qualitative component in order to ensure sustainability in the country\\'s economic development. The importance of such concepts as professionalism, potential, competence, and qualifications is increasing, contributing to increased efficiency, productivity, performance, and effectiveness. However, it is necessary to take into account the obstacles that arise in the education system due to the increasing complexity of the situation and
2025-09-10

Journal number 3 ∘ YUZBASHIYEVA GULSHEN ZAID QIZI ∘

THE IMPACT OF INVESTMENT ACTIVITY ON THE RESULTS OF ECONOMIC ACTIVITY

journal N3 2025 DOI: 10.52340/ekonomisti.2025.03.08 Summary The article notes that it is advisable not only to forecast the volume and directions of investments, but also to comprehensively assess their impact on the technical and technological condition of the fixed capital used in the production process. The growing volume of investments creates favorable conditions for the modernization of production equipment, the introduction of new technologies and the abandonment of obsolete technical solutions. This, in turn, contributes to increasing the sustainability of enterprises, improving the asset structure and forming an effective resource management system. Investments play a key role in increasing the competitiveness of enterprises in the domestic and foreign markets. They provide not only an increase in labor productivity, but also an improvement in the quality of products. The article pays special attention to the innovative aspect of investment activity, since it is
2025-09-10

Journal number 3 ∘ Nazira Kakulia ∘ Nodar Kiladze ∘

The Impact of Artificial Intelligence and Machine Learning on Monetary Policy

journal N3 2025 DOI: 10.52340/ekonomisti.2025.03.09 Summary This article explores the impact of machine learning (ML) and artificial intelligence (AI) on monetary policy worldwide, highlighting the increasing role of these tools in enhancing central bank efficiency and analytical capabilities. While traditional monetary policy tools are based on economic theory, expert judgment, and econometric models, ML and AI techniques are used to improve forecasting reliability, risk assessment, and policy communication. Machine learning is efficient in macroeconomic forecasting and nowcasting by processing vast datasets and capturing non-linear relationships that evade classical models. For example, ML methods such as random forests have outperformed standard models in forecasting GDP growth and inflation, particularly in data-rich environments with volatile conditions. However, the success of ML varies with context. Overly complex models may overfit or underperform during regime shifts,
2025-09-10

Journal number 3 ∘ Gigi Elizbarashvili ∘

THE ECONOMY OF POST-COMMUNIST GEORGIA: FROM ACTUAL ECONOMIC GROWTH TO “HYPOTHETICAL” ECONOMIC GROWTH

journal N3 2025 Expanded Summary Georgia is a post-communist country that simultaneously aspires to join the European Union. To analyze its economic situation alongside that of other post-communist or EU member states, it is essential to compare the economic growth of these countries with one another. However, we cannot directly compare actual economic growth figures because the economies differ significantly. To make meaningful comparisons, it is necessary to evaluate these economies against a common benchmark. For this purpose, we selected a benchmark country and compared the economic indicators of other countries relative to it. Our research was conducted using both actual and forecasted data from the IMF. Since the study revealed Ireland\'s financial advantage over other countries, we chose Ireland as the benchmark and compared the economic indicators of other countries to it. As a result, we found that the Irish economy was 6.26 times larger than the Georgian economy in 2022,
2025-09-10

Journal number 3 ∘ Zviad Gabroshvili ∘

Modeling the Construction of Benchmark Bonds for Public Debt Models

journal N3 2025 Abstract The paper discusses the modeling of benchmark bonds for public debt sustainability and, consequently, macroeconomic stability. The importance of benchmarks for financial development is emphasized, while attention is focused on their risks. Modeling these types of financial instruments is important for risk management. One of the methods for this is object-oriented programming and simulations, which are used in modern financial and macroeconomic analysis methods. The paper discusses an example and a small model that is close to reality and simulates the construction of a benchmark. The paper proposes ways to simulate the construction of benchmarks by modeling individual securities using the object-oriented programming paradigm. Keywords: Public debt sustainability, Benchmark bonds, Economic modeling, Object-oriented programming JEL classification codes: C61, H63, E44 Introduction In modern times, attention is increasingly focused on public
2025-09-10

Journal number 3 ∘ Shmagi Butskhrikidze ∘

The Fourth Industrial Revolution and Expected Changes in the Labor Market and Technologies

journal N3 2025 Abstract The article substantiates the importance of the Fourth Industrial Revolution in the development of the modern economy. It also discusses the technologies and innovations driving it. The article provides a historical overview of the significance of such phenomena as industrial revolutions and demonstrates the changes that the three previous revolutions brought for a better understanding of the importance of the Fourth Industrial Revolution. The paper provides a comprehensive overview of the Fourth Industrial Revolution, examining its historical context, technological foundations, and its multidimensional impact on the economic, social, and political spheres. The article discusses the role of data as a critical asset in the digital age, along with issues related to cybersecurity, data governance, and digital ethics. The paper discusses the components of the Fourth Industrial Revolution, such as artificial intelligence, the intelligence of things, the
2025-09-10

Journal number 3 ∘ Nino Sumbadze ∘

The Economic Policy of Social Partnership in Georgia

journal N3 2025 Expanded Summary This article explores the role and development of social partnership and social dialogue in the European Union and Georgia, highlighting their significance for economic reforms, inclusive growth, and democratic governance. In the EU context, social dialogue—defined as institutionalized negotiations between employers\' organizations, trade unions, and sometimes government bodies—has proven essential for promoting productivity, innovation, competitiveness, and social cohesion. The EU’s model is rooted in strong institutional mechanisms and legal frameworks that encourage participation of social partners at national and supranational levels in shaping labor, social, and economic policies. European experience shows that countries with robust traditions of social partnership tend to perform better in times of economic crisis and demonstrate greater resilience in both social and economic dimensions. The Treaty on the Functioning of the
2025-09-10

Journal number 3 ∘ Nikoloz Javakhishvili ∘

Developed and Developing Economies in the Age of Artificial Intelligence: A Comparative Analysis of Economic Transformation

journal N3 2025 1. Introduction and Thesis AI has become a transformative force in the global economy, improving productivity, altering labor dynamics, and enabling new business models. However, this impact is not uniform across countries. Developed economies—particularly in North America and Europe—have advanced AI ecosystems, while many developing countries face foundational challenges. The article argues that the divergence stems from structural readiness: the presence or absence of digital infrastructure, human capital, investment capacity, and governance frameworks. By comparing developed countries with Georgia, the article shows how these structural factors mediate the depth and direction of AI’s economic influence. 2. Conceptual Framework AI is defined in terms of three types: narrow AI (task-specific), general AI (hypothetical, human-level), and generative AI (which creates content like text or images). Today’s real-world applications fall under
2025-09-10

Journal number 3 ∘ Papuna Gikorashvili ∘

The Impact of the COVID-19 Pandemic on the Capital Structure of the Georgian Wine Industry: A Financial Stability Analysis, 2019–2023

journal N3 2025 Expanded Summary The COVID-19 pandemic created unprecedented financial pressure across global industries, with export-dependent sectors bearing the brunt of the shock. One such sector is Georgia’s wine industry—an economic pillar that not only drives rural employment but also represents one of the country’s most recognized international products. This study examines how wine-producing firms in Georgia restructured their capital profiles during and after the COVID-19 crisis, highlighting the adjustments in leverage, profitability, and financial resilience between 2019 and 2023. The research is based on a longitudinal panel dataset covering 47 wine-producing firms that met specific criteria: annual revenues above 500,000 GEL, continuous financial data availability across the study period, and active engagement in wine exports. To ensure robustness, extreme outliers were removed using Tukey’s method, and the final dataset was subjected to
2025-09-10

Journal number 3 ∘ Salome Liparteliani ∘

Insurance Industry Transformation in Georgia: Regulations and Prospects

journal N3 2025 Expanded Summary This paper explores the transformation of the Georgian insurance industry in the context of ongoing regulatory reforms, economic developments, and alignment with international standards. In recent years, Georgia’s insurance sector has demonstrated notable growth, reaching a record-breaking milestone in 2023 when the total value of gross written premiums surpassed 1 billion GEL for the first time. Despite this achievement, the market remains relatively underdeveloped, with insurance penetration still at a modest 1.33% of GDP—far below the average levels observed across the Eurozone. This gap highlights the untapped potential and the need for systemic improvements in the sector\'s structure, regulatory framework, and consumer engagement. The primary focus of this study is to evaluate the regulatory evolution of Georgia’s insurance market, particularly in relation to the implementation of Solvency II directives and other
2025-09-10

Journal number 3 ∘ Tural Kishizada ∘

Strategic Decision-Making and SME Development under Monetary Policy Shocks: Evidence from Azerbaijan

journal N3 2025 DOI: 10.52340/ekonomisti.2025.03.10 Annotation: This study investigates the impact of banking sector credit policies and the Central Bank of Azerbaijan’s policy interest rate on the business environment for small and medium-sized enterprises (SMEs) between 2010 and 2025. Using descriptive statistics, correlation analysis, and regression models, the paper highlights how monetary tightening and risk-averse banking practices constrained SME growth, while accommodative policies and targeted support facilitated recovery. The findings emphasize the need for inclusive financial reforms to strengthen SME resilience and foster sustainable diversification. Keywords: Small and Medium Enterprises (SMEs), Banking Sector, Credit Policy, Monetary Policy, Central Bank Interest Rate, Azerbaijan, Financial Stability, Business Environment Introduction Small and medium-sized enterprises (SMEs) are vital for diversifying economies, creating jobs, and fostering innovation,
2025-09-10