Transition economy: Georgia. Transition economies are the economies that have changed from one kind of economy to another.

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Transition economy: Georgia

Transition economies are the economies that have changed from one kind of economy to another. There has been many instances where this has been the case. For example in Russia in 1917, when the Bolsheviks revolted to bring the capitalist state, following an ideology presented by Adam Smith in the “Wealth of Nations”, to a command economy, following Karl Marx’s theories. These two economies are very different from each other. The capitalist economy is an economy which is when the factors of production, namely land, labour, capital, and entrepreneurship are owned by privately and the state has no or almost no power, but the command economy is where everything is state owned and is put to use by a communist state, the governments usually have 5 year plans to plan everything beforehand. However this proved unproductive and therefore most of the former communist countries are developing a more capitalist perspective. These countries, which are going from command to a more free market economy, are the transition economies.

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One of these transitional economies is Georgia. Georgia was one of the countries that made up the USSR before its fall in 1992, when Georgia regained their independence. Georgia is a country in Europe which is on the borders of Russia and Turkey and is classified as a transition economy. The table below shows statistics from 1995 concerning Georgia’s economy.

On the table, the GDP is growing which is a positive sign that there is at least some economic growth in the country. Also the unemployment rate is steadily going down. Even though there was some rise in the unemployment ...

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