The Global Financial Crises: The Causes and Management of Crisis

Almost all countries in the world have experienced financial crisis that occasionally occurs at certain times and in particular regions, but there is crisis that is “like an economic tsunami” spreads rapidly around the world and creates a serious threat to its development. The origins of the global financial crisis are more or less the same for different countries. The crisis originated in the financial centers in the developed countries and then gradually extends to developing countries. As a result, developing countries are the biggest victims of the crisis. What are the causes of the global financial crisis? Can we predict and therefore prevent it? In our opinion, understanding the history of the world economy help us to recognize the warning signs of the next one. This article provides a brief history of global financial crisis and after analyzing the number of causes and consequences of financial crisis we present our elements of a crisis management. Keywords: Globa

Journal number 1 ∘ Giorgi Shubladze ∘

Once Again for the Modern Definition of Economic Theory

Any science develops with attending specification on its paradigm and designation. In Georgian special literature – along with traditional designation – the terms “Economics” and “Theoretical Economics” are used to designate economic theory – one of the oldest sciences. Economic is universal integral science that develops according to the principle of continuity. Therefore, preference should be given to the designation “General Economic Theory”. Keywords: Economy; Market Economy: Theoretical Economy; Economic Theory; Political Economy; General Economic Theory. JEL Codes: A10, A11, B40, B41. ერთხელ კიდევ ეკონომიკური თეორიის თანამედროვე დეფინიციის საკითხისთვის გლობალიზაციამ XXI საუკუნეში კაცობრიობის წინაშე და�

Journal number 1 ∘ Paata Koguashvili ∘

For Political Assessment of the Importance of the Agricultural Cooperative Process

The article refers to the development of cooperation and intersectional integration in rural areas. Under the ages of the cooperatives, the most important locally available recourses of the intellectual, economic and organizational arrangement will be fully highlighted, also will be created a single cycle of production, processing and marketing of agricultural products. Members of the cooperatives will get the total income from the sales and by themselves they will decide on earmarking the respective funds for reproduction and/or handling of common social problems. Development of cooperatives will increase the income of the most part of the country’s population and will lead to a dynamic improvement of its socio-economic situation. Keywords: Cooperative; Agro-Industrial Integration; Agricultural Cooperative; Farming. JEL Codes: Q10, Q12, Q13. სტატიაში განხილულია სასოფლო-სამეურნეო კოოპერატ

Journal number 1 ∘ Revaz Lordkipanidze ∘

About Some of the Flaws in Competition Theory and Its Perfection Mechanism

It’s a well-known fact that since the world’s Great Depression (the 30s of the XX century), the debate between neoclassical supporters for the “Invisible Hand” of Adam Smith’s competition and supporters of Keynesian regulation has become more acute. Some of them disclaimed the “Invisible Hand” in general and the new neoclassical synthesis came as an intermediary. The goal of this presented work isn’t a criticism of genial Smith – we think that it’s needed some corrects in the established understanding from the time of Smith and to the present method of Herfindahl-Hirschman about a large number of competitors determining the perfection of competition. With such an imperfect method, we can erroneously7 divide the effective local big business or prevent the merger of business in a decent way, violate the presumption of innocence of the local entrepreneurs and create favorable conditions for secret collusions of external dishone

Journal number 1 ∘ Shota Shaburishvili ∘

The Phenomenon of the Global Value Chains in Modern International Business

The paper considers the main theoretical approaches to understanding global value chains and analyzes their role in the modern international business. It is emphasized that in view of the growing and economic importance of the global value chains, today this phenomenon is in the focus of many countries and international institutions. There are analyzed mechanisms of coordination, structure, the importance of individual points and the effectiveness of possible positions of the company in the global value chains; revealed the advantages and disadvantages of participation in the global value chains. We have developed recommendations on what measures should the state carry out to reach favorable position in the global value chain. Keywords: Global Value Chain; Fragmentation; Vertical Integration; Outsourcing; “Smiling” Curve. JEL Codes: M16, F23, F10. დამატებული ღირებულების

Journal number 1 ∘ Ineza Gagnidze ∘

The Role of Systemic Connection between Cluster and Entrepreneurial University in the Development of Economy

In the paper, based on the global competitiveness of the World Economy Forum 2008-2017, it is estimated the quality of business development and education system in Georgia. In order to improve the situation, it is proposed to form clusters and Entrepreneurial Universities in the economy, due to the existing systemic connection. On the one hand, more than 3000 strong clusters are in Europe and on the other hand, the model of Entrepreneurial University is widely spread. Their joint research is not in scientific literature, because as the means of the development of local economy they became popular at various times. In several works we tried to make a joint and systemic review. The paper provides a model that reflects the systemic connection between Cluster and Entrepreneurial University for the development of economy. Keywords: Entrepreneurial University; Cluster; Education; Business. JEL Codes: O31, O38, O39.

Journal number 1 ∘ Khatuna Tabagari ∘

The Role of Oil in World Economy (On the Ten Leading Oil Producer Countries)

Oil is an important hydrocarbon, which usually is used for gaining energetic, geoeconomic and geopolitic goals. Its importance is gradually increasing with time. This commodity, produced by the world's ten top oil countries, plays a significant role in the social and economic develpment of the corresponding state. Accordingly, the article hereto discusses the amount of oil produced by the above-mentioned countries and the corresponding created income, as well as the share of such income of the country's GDP. This method allows us to assess the imoact of oil production on the economy of oil producing countries. Keywords: Oil Producer Counties; Income from Oil Production; Oil Price; GDP and Oil. JEL Codes: Q30, Q32, Q43. ნავთობის როლი მსოფლიო ეკონომიკაში (ნავთობის მწარმოებელი 10 წამყვანი ქვეყნის მაგალითზე) დღეისთვ

Journal number 1 ∘ Otar Soselia ∘

The Evolution of Labor Compensation Systems in the Modern World

The article reviews the modern forms and systems of labor remuneration. These systems are used in economically developed countries. Here are examples of labor remuneration systems of different countries. Labor compensation organization trend development is presented as well. Keywords: Wage Sistem; Piece-Work and Time-Based Forms of Payment: Tariff Rate; Grading System. JEL Codes: J30, J31, J38. შრომის ანაზღაურების სისტემების ევოლუცია თანამედროვე მსოფლიოში თანამედროვე საბაზრო პირობებში შრომის ორგანიზაციის სრულყოფა მნიშვნელოვანია შრომის ოპტიმალური რაოდენობისა და ხარისხის, დაგეგმილი საწარმოო შედეგების �

Journal number 1 ∘ Nugzar Todua ∘ Beka Vashakidze ∘

Consumers Attitude towards Personal Selling on the Georgian Market

The article analyzes the main directions of using marketing communications, in which special attention is paid to the roleand modern approaches to personal selling. To determine thi attitude of Georgian consumers to personal selling, conducted a marketing research. On the basis of the research identified levels of interest,awarness, reliability and satisfaction of Georgian consumers about a personal selling. Established also the frequencies of interest and reliability of consumers on information about personal selling. The article reflects the assessments of both the current situation and individual characteristics of personal selling on the Georgian market. From the point of view of the relation to personal selling, in the work are identified the main types of consumers. In the paper is given a dispersion anlysis of the impact of interest on consumer awarness about personal selling, as well as the influence of awarness, reliability and setisfaction consumers about personal selli

Journal number 1 ∘ Giorgi Shikhashvili ∘

The Use of Modern and Methodological Technologies in Student Learning Process

Research of current theoretical-methodological and practical-applied issues of modern organizational and methodological technologies is very important for the progressive development of higher education in economic profile in Georgia. The method of teaching implies the way the teacher works with the students through which the optimal transfer and application of the discipline is studied. The article discusses the following issues: Didactic Methodology and Methodology of Teaching economic Disciplines; Author's activities in the field of research and use of modern orgnizational-methodological technologies; student's opinions about the effecticness and need of inter-survey method. It is necessary to expand the target, universal and regular use of the latest scientific achievements and educational practices in the student's teaching process. Keywords: Pedagogy; Didactics; Modern Teaching Methods; Methodology of Teaching Economics; Inter-Survey. JEL Codes:I20, I21, I29. თან�

Journal number 1 ∘ Besik Bolkvadze ∘

Contemporary Challenges of the State Investment Policy: Pragmatic-Conceptual Approaches

The article considers the challenging issues of the investment policy in Georgia from pragmatic as well as conceptual pont of view, where the role and importance of investment policy are presented, legislative base of investments are discussed, inevitability of transparency, measurability and effectivness of investment process is reasond, proactive investment approach is prioritized, links between of privatization and investment processes are analyzed, issues of projections of investment flows, complex utilization of investment marketing instruments, effective management of investment cycle, facilitation of post-investm,ent activity, investigation of investment potential, combined analysis of investment indicators and other actual questions are also characterized. Herewith, the author suggests some corresponding problem-solving recommendations directed towards policy implementation at all governmental levels. Keywords: Proactive Investment Policy; Post-Investment Activity; Inves

Journal number 1 ∘ Vladimer Basaria ∘

For the Improvement of Social Orientation of Tax and Budgetary Policies

Independent Georgia has declared socialyy oriented market economy. A lot of things have been done in this period. As far as it is known, distribution of national income is mainly based on the productivity of the production factoes and the social orientation is distinguished in its distribution. Furthermore, in the direction many more needs to be done to create stable conditions for social justice and economic growth: 1. The tax system of progressive taxation of economic subjects has not been introduced yet. On the one hand, it will somewhat simplify the tax revenue of the low-income taxes at the expence of higher revenues and (second) make the latter more productive in revenue; 2. To maximize the luxury items (precious cars, yachts, boats, helicopters, jewelery items and etc.) should be significantly espanded. This measure will also positively impact on the problems mentioned in article 1; 3. The practice must be considered inadmissible (relevant regualtions should be adopted)

Journal number 1 ∘ Ana Chagelishvili ∘

The Peculiarities of Market Research in th Process of Public Procurements

To do public procurement rationally is mainly based on high-quality supply market analysis. Thi process has a lot of defects nowadays. The purpose of this work is to discuss recommended methodology of supply market analysis, work out considerations and recommendations about important problems of public procurement. as a methodology of supply market analysis is taken approved method of other countries public procurement: M. porter's 5 forces analysis and PESTEL analysis. There are discussed supply market analysis recommewndations of the State Procurement Agency in this work. Results and recommendations can be foreseen by organizations which procures goods/service. The work also is important for organizations in private sector; they can realize and plan correctly future negotiations between them and state institutions. Keywords: Public Procurement; Supply Market Analyzis; 5 Forcs Analyzis; PESTEL Analizis. JEL Codes: H75, H59, R31 ბაზრის კვლევის თა

Journal number 1 ∘ Merab Jikia ∘

Determination of Relevant and Alternative Costs in Decision Making

When making a decision, only those expenses and revenues are taken into account, whose amount depends on the addeptable decision. Determination of the relevance of costs depends on the situation: in one situation the cost is relevant and in other one the same cost is irrelevant. In accordance with the separate article of the product, the decision trees determination of relevant materials, labor and overhead costs are presented schematically. Specific examples are reviewed according to each tree. The general methodology provides for assessing alternatives and decision-making on how determine relevant and alternative costs. Keywords: Relevant Costs;Cash Flows; Decision Tree. JEL Codes: E44, M21, M29 რელევანტური და ალტერნატიული დანახარჯების განსაზღვრა გადაწყვეტილების მიღებისას ალტერნატიულ პროექტ

Economics and Business Referential and Reviewed International Scientific-Analytical Journal of Ivane Javakhishvili Tbilisi State University, Faculty of Economics and Business

ISSN 1987-5789 ESSN 2587-5426 doi 10.56079	Journal number 1 ∘ Vasil Katsiashvili ∘ The Global Financial Crises: The Causes and Management of Crisis Almost all countries in the world have experienced financial crisis that occasionally occurs at certain times and in particular regions, but there is crisis that is “like an economic tsunami” spreads rapidly around the world and creates a serious threat to its development. The origins of the global financial crisis are more or less the same for different countries. The crisis originated in the financial centers in the developed countries and then gradually extends to developing countries. As a result, developing countries are the biggest victims of the crisis. What are the causes of the global financial crisis? Can we predict and therefore prevent it? In our opinion, understanding the history of the world economy help us to recognize the warning signs of the next one. This article provides a brief history of global financial crisis and after analyzing the number of causes and consequences of financial crisis we present our elements of a crisis management. Keywords: Globa Journal number 1 ∘ Giorgi Shubladze ∘ Once Again for the Modern Definition of Economic Theory Any science develops with attending specification on its paradigm and designation. In Georgian special literature – along with traditional designation – the terms “Economics” and “Theoretical Economics” are used to designate economic theory – one of the oldest sciences. Economic is universal integral science that develops according to the principle of continuity. Therefore, preference should be given to the designation “General Economic Theory”. Keywords: Economy; Market Economy: Theoretical Economy; Economic Theory; Political Economy; General Economic Theory. JEL Codes: A10, A11, B40, B41. ერთხელ კიდევ ეკონომიკური თეორიის თანამედროვე დეფინიციის საკითხისთვის გლობალიზაციამ XXI საუკუნეში კაცობრიობის წინაშე და� Journal number 1 ∘ Paata Koguashvili ∘ For Political Assessment of the Importance of the Agricultural Cooperative Process The article refers to the development of cooperation and intersectional integration in rural areas. Under the ages of the cooperatives, the most important locally available recourses of the intellectual, economic and organizational arrangement will be fully highlighted, also will be created a single cycle of production, processing and marketing of agricultural products. Members of the cooperatives will get the total income from the sales and by themselves they will decide on earmarking the respective funds for reproduction and/or handling of common social problems. Development of cooperatives will increase the income of the most part of the country’s population and will lead to a dynamic improvement of its socio-economic situation. Keywords: Cooperative; Agro-Industrial Integration; Agricultural Cooperative; Farming. JEL Codes: Q10, Q12, Q13. სტატიაში განხილულია სასოფლო-სამეურნეო კოოპერატ Journal number 1 ∘ Revaz Lordkipanidze ∘ About Some of the Flaws in Competition Theory and Its Perfection Mechanism It’s a well-known fact that since the world’s Great Depression (the 30s of the XX century), the debate between neoclassical supporters for the “Invisible Hand” of Adam Smith’s competition and supporters of Keynesian regulation has become more acute. Some of them disclaimed the “Invisible Hand” in general and the new neoclassical synthesis came as an intermediary. The goal of this presented work isn’t a criticism of genial Smith – we think that it’s needed some corrects in the established understanding from the time of Smith and to the present method of Herfindahl-Hirschman about a large number of competitors determining the perfection of competition. With such an imperfect method, we can erroneously7 divide the effective local big business or prevent the merger of business in a decent way, violate the presumption of innocence of the local entrepreneurs and create favorable conditions for secret collusions of external dishone Journal number 1 ∘ Shota Shaburishvili ∘ The Phenomenon of the Global Value Chains in Modern International Business The paper considers the main theoretical approaches to understanding global value chains and analyzes their role in the modern international business. It is emphasized that in view of the growing and economic importance of the global value chains, today this phenomenon is in the focus of many countries and international institutions. There are analyzed mechanisms of coordination, structure, the importance of individual points and the effectiveness of possible positions of the company in the global value chains; revealed the advantages and disadvantages of participation in the global value chains. We have developed recommendations on what measures should the state carry out to reach favorable position in the global value chain. Keywords: Global Value Chain; Fragmentation; Vertical Integration; Outsourcing; “Smiling” Curve. JEL Codes: M16, F23, F10. დამატებული ღირებულების Journal number 1 ∘ Ineza Gagnidze ∘ The Role of Systemic Connection between Cluster and Entrepreneurial University in the Development of Economy In the paper, based on the global competitiveness of the World Economy Forum 2008-2017, it is estimated the quality of business development and education system in Georgia. In order to improve the situation, it is proposed to form clusters and Entrepreneurial Universities in the economy, due to the existing systemic connection. On the one hand, more than 3000 strong clusters are in Europe and on the other hand, the model of Entrepreneurial University is widely spread. Their joint research is not in scientific literature, because as the means of the development of local economy they became popular at various times. In several works we tried to make a joint and systemic review. The paper provides a model that reflects the systemic connection between Cluster and Entrepreneurial University for the development of economy. Keywords: Entrepreneurial University; Cluster; Education; Business. JEL Codes: O31, O38, O39. Journal number 1 ∘ Khatuna Tabagari ∘ The Role of Oil in World Economy (On the Ten Leading Oil Producer Countries) Oil is an important hydrocarbon, which usually is used for gaining energetic, geoeconomic and geopolitic goals. Its importance is gradually increasing with time. This commodity, produced by the world's ten top oil countries, plays a significant role in the social and economic develpment of the corresponding state. Accordingly, the article hereto discusses the amount of oil produced by the above-mentioned countries and the corresponding created income, as well as the share of such income of the country's GDP. This method allows us to assess the imoact of oil production on the economy of oil producing countries. Keywords: Oil Producer Counties; Income from Oil Production; Oil Price; GDP and Oil. JEL Codes: Q30, Q32, Q43. ნავთობის როლი მსოფლიო ეკონომიკაში (ნავთობის მწარმოებელი 10 წამყვანი ქვეყნის მაგალითზე) დღეისთვ Journal number 1 ∘ Otar Soselia ∘ The Evolution of Labor Compensation Systems in the Modern World The article reviews the modern forms and systems of labor remuneration. These systems are used in economically developed countries. Here are examples of labor remuneration systems of different countries. Labor compensation organization trend development is presented as well. Keywords: Wage Sistem; Piece-Work and Time-Based Forms of Payment: Tariff Rate; Grading System. JEL Codes: J30, J31, J38. შრომის ანაზღაურების სისტემების ევოლუცია თანამედროვე მსოფლიოში თანამედროვე საბაზრო პირობებში შრომის ორგანიზაციის სრულყოფა მნიშვნელოვანია შრომის ოპტიმალური რაოდენობისა და ხარისხის, დაგეგმილი საწარმოო შედეგების � Journal number 1 ∘ Nugzar Todua ∘ Beka Vashakidze ∘ Consumers Attitude towards Personal Selling on the Georgian Market The article analyzes the main directions of using marketing communications, in which special attention is paid to the roleand modern approaches to personal selling. To determine thi attitude of Georgian consumers to personal selling, conducted a marketing research. On the basis of the research identified levels of interest,awarness, reliability and satisfaction of Georgian consumers about a personal selling. Established also the frequencies of interest and reliability of consumers on information about personal selling. The article reflects the assessments of both the current situation and individual characteristics of personal selling on the Georgian market. From the point of view of the relation to personal selling, in the work are identified the main types of consumers. In the paper is given a dispersion anlysis of the impact of interest on consumer awarness about personal selling, as well as the influence of awarness, reliability and setisfaction consumers about personal selli Journal number 1 ∘ Giorgi Shikhashvili ∘ The Use of Modern and Methodological Technologies in Student Learning Process Research of current theoretical-methodological and practical-applied issues of modern organizational and methodological technologies is very important for the progressive development of higher education in economic profile in Georgia. The method of teaching implies the way the teacher works with the students through which the optimal transfer and application of the discipline is studied. The article discusses the following issues: Didactic Methodology and Methodology of Teaching economic Disciplines; Author's activities in the field of research and use of modern orgnizational-methodological technologies; student's opinions about the effecticness and need of inter-survey method. It is necessary to expand the target, universal and regular use of the latest scientific achievements and educational practices in the student's teaching process. Keywords: Pedagogy; Didactics; Modern Teaching Methods; Methodology of Teaching Economics; Inter-Survey. JEL Codes:I20, I21, I29. თან� Journal number 1 ∘ Besik Bolkvadze ∘ Contemporary Challenges of the State Investment Policy: Pragmatic-Conceptual Approaches The article considers the challenging issues of the investment policy in Georgia from pragmatic as well as conceptual pont of view, where the role and importance of investment policy are presented, legislative base of investments are discussed, inevitability of transparency, measurability and effectivness of investment process is reasond, proactive investment approach is prioritized, links between of privatization and investment processes are analyzed, issues of projections of investment flows, complex utilization of investment marketing instruments, effective management of investment cycle, facilitation of post-investm,ent activity, investigation of investment potential, combined analysis of investment indicators and other actual questions are also characterized. Herewith, the author suggests some corresponding problem-solving recommendations directed towards policy implementation at all governmental levels. Keywords: Proactive Investment Policy; Post-Investment Activity; Inves Journal number 1 ∘ Vladimer Basaria ∘ For the Improvement of Social Orientation of Tax and Budgetary Policies Independent Georgia has declared socialyy oriented market economy. A lot of things have been done in this period. As far as it is known, distribution of national income is mainly based on the productivity of the production factoes and the social orientation is distinguished in its distribution. Furthermore, in the direction many more needs to be done to create stable conditions for social justice and economic growth: 1. The tax system of progressive taxation of economic subjects has not been introduced yet. On the one hand, it will somewhat simplify the tax revenue of the low-income taxes at the expence of higher revenues and (second) make the latter more productive in revenue; 2. To maximize the luxury items (precious cars, yachts, boats, helicopters, jewelery items and etc.) should be significantly espanded. This measure will also positively impact on the problems mentioned in article 1; 3. The practice must be considered inadmissible (relevant regualtions should be adopted) Journal number 1 ∘ Ana Chagelishvili ∘ The Peculiarities of Market Research in th Process of Public Procurements To do public procurement rationally is mainly based on high-quality supply market analysis. Thi process has a lot of defects nowadays. The purpose of this work is to discuss recommended methodology of supply market analysis, work out considerations and recommendations about important problems of public procurement. as a methodology of supply market analysis is taken approved method of other countries public procurement: M. porter's 5 forces analysis and PESTEL analysis. There are discussed supply market analysis recommewndations of the State Procurement Agency in this work. Results and recommendations can be foreseen by organizations which procures goods/service. The work also is important for organizations in private sector; they can realize and plan correctly future negotiations between them and state institutions. Keywords: Public Procurement; Supply Market Analyzis; 5 Forcs Analyzis; PESTEL Analizis. JEL Codes: H75, H59, R31 ბაზრის კვლევის თა Journal number 1 ∘ Merab Jikia ∘ Determination of Relevant and Alternative Costs in Decision Making When making a decision, only those expenses and revenues are taken into account, whose amount depends on the addeptable decision. Determination of the relevance of costs depends on the situation: in one situation the cost is relevant and in other one the same cost is irrelevant. In accordance with the separate article of the product, the decision trees determination of relevant materials, labor and overhead costs are presented schematically. Specific examples are reviewed according to each tree. The general methodology provides for assessing alternatives and decision-making on how determine relevant and alternative costs. Keywords: Relevant Costs;Cash Flows; Decision Tree. JEL Codes: E44, M21, M29 რელევანტური და ალტერნატიული დანახარჯების განსაზღვრა გადაწყვეტილების მიღებისას ალტერნატიულ პროექტ