Adam Smith, who wrote the Wealth of Nations, stated that an invisible hand moves market forces and the economy is operating efficiently when supply and demand are able to achieve equilibrium without government intervention. In the Georgia Industrial Development Group in the Ministry of Economy and Sustainable Development of Georgia offers an interesting opinion on his popular economist notion. The hand is invisible because it does not exist. In short, the group believes that developing economies are unable to achieve their full potential without substantial cooperative government measures.
I have been able to hit the ground running at the beginning of my internship as I have been exposed to many economic concepts that are essential for the group’s work at Boston College. During the week’s discussion, the group was faced with a challenge of pricing of trout for export. While trout in Georgia costs approximately 10 GEL per kg (around 5.4 USD), in the UK the same trout can go for as much as 25 GBP per kg (around 35 USD). While the price of trout in Georgia was at extremely competitive rates, the group feared that an increase in exports would lower prices so much that producers would be unable to expand or profit due to the producer’s wishes that they remain the ones exporting the most. I was able to apply the notion of price floors, which I have thoroughly examined in my economics classes at BC, and state that if the government would declare a minimum price that any producer could not go under, the problem would be solved. While other problems may arise, this example highlights how I have been able to utilize and apply my knowledge gained at BC to real-world problems.
What is evident, thus far, in my internship is that I am able to communicate with other group members regarding economic problems and concepts. As any scholar of economics knows, the equilibrium of supply and demand is essential for the economy’s smooth operation. I have now been able to apply familiar economic concepts to the World Bank’s data and construct models that show how certain sectors are performing in aggregate. This theoretical skill, I believe, is essential for any workplace success and I am enthusiastic to further approach real-world problems with an academic background.
Written by Luka Kachukhashvili, BC Class of 2017