How Fiscal Policy Affects Non-Oil Economic Performance in Azerbaijan?

Aliyev, Khatai; Nadirov, Orkhan

doi:10.2139/ssrn.2884267

Cited by 11 publications

(8 citation statements)

References 33 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The question of whether this oil abundance is a “curse” or a “blessing” has been examined by Hasanov (2010) , who emphasizes that oil revenues mainly go to the nontradable sector. Further studies (e.g., Aliyev, 2019 , Aliyev and Mikayilov, 2016 , Aliyev and Nadirov, 2016 , Aliyev et al, 2016 , Dehning et al, 2016 , Gurbanov et al, 2017 , Hasanov, 2013b , Hasanov and Alirzayev., 2016 , Hasanov et al, 2016 , Hasanov et al, 2018 ) confirm that (oil revenue-financed) government expenditures have a positive impact on economic growth in the non-oil sector in Azerbaijan. Huseynov and Ahmadov (2013) provide a theoretical framework for this effect in an oil-exporting country and show that the procyclicality of fiscal policy is the major transmission channel of oil price shocks to the rest of the economy.…”

Section: Background On Azerbaijanmentioning

confidence: 97%

The impact of oil price changes on selected macroeconomic indicators in Azerbaijan

Zulfigarov

Neuenkirch

2020

Economic Systems

View full text Add to dashboard Cite

Section: Background On Azerbaijanmentioning

confidence: 97%

The impact of oil price changes on selected macroeconomic indicators in Azerbaijan

Zulfigarov

Neuenkirch

2020

Economic Systems

View full text Add to dashboard Cite

“…This has motivated series of studies to be conducted on the influence of monetary and fiscal policy variables in the promotion of non-oil exports. A recent study conducted in this regard is Aliyev & Nadirov (2016) who investigated the short and long-run effects of tax revenues on non-oil exports using quarterly data covering 2000Q1-2015Q2. With autoregressive Distributed Lag Bounds Testing (ARDLBT) Approach to cointegration, the study found significant long-run effects of both budget expenditures and tax revenues but in the short-run, the effect was not significant.The study by Hasanov (2013a) investigated the role of fiscal policy in the development of Azerbaijan's non-oil sector with special focus on government expenditures using single equation-based, Autoregressive Distributed Lags Bounds Testing (ADLBT) approach and system-based cointegration approach for the period 1998Q4-2012Q3.…”

Section: Figure-1 Policy MIX and Is-lm Frameworkmentioning

confidence: 99%

Analysis of the Responsiveness of Non-Oil Exports to Fiscal and Monetary Policy Actions

Edeme

Obiayo

2017

Journal of Accounting, Business and Finance Research

View full text Add to dashboard Cite

The paper aims to examine the responsiveness of non-oil exports to monetary and fiscal policy actions and to ascertain if there is any significant difference in the response of non-oil exports to fiscal and monetary policy actions. Adopting the partial determination model, the paper found that there ismonetary-fiscal policy interaction effect in the short-run but the effect became undefined in the long-run. It was also revealed that the response of non-oil exports is dominated by fiscal policy actions than the responses to monetary policy. Also monetary policy influences are temporary whereas the fiscal policy effect seems permanent. In this regard, it will be more appropriate to place greater reliance on fiscal policy form of stabilization action. The adoption of mixed monetary-fiscal policy is also recommended. This is because, mixed monetary-fiscal policy actions operates more quickly and expand non-oil exports within a short while. Though, the interaction effect is undefined in the long run, it is appropriate to stimulate non-oil export in the short-run.

show abstract

“…However, starting from 2004, in the second decade (2004-2013), the Azerbaijani economy entered a high stage of development and received large amounts of revenues from oil. [1,2]. During this period, the economy grew almost 3 times and had an average growth rate of 13.3%.…”

Section: Resultsmentioning

confidence: 95%

“…It should be noted that the econometric models of the relationship between economic variables presented in the article allowed to achieve adequate results with the abovementioned statistical features. The results of the assessment of the long-term impact model of oil prices on Azerbaijan's GDP and state budget expenditures are given in (1) and (2) Here, the numbers in parentheses () indicate the corresponding probabilities. Y represents Azerbaijan's GDP, X represents state budget expenditures, and O represents the world market price of Brent oil.…”

Section: Gdp Budget Expendituresmentioning

confidence: 99%

Fiscal policy and oil factor: Evaluation of the effects in global economic development

Guluzada

2021

SHS Web of Conf.

View full text Add to dashboard Cite

Research background: Today, the acceptance of fiscal policy decisions necessitates the analysis of policy efficiency with the help of optimization issues, the study of cause-and-effect relationships between budget expenditures and macroeconomic indicators such as economic growth, revenues, and the evaluation of a number of econometric models among all. The need for these areas makes it important to study and analyze the effects of fiscal policy on the economy, which allows to justify the relevance of the topic of the article. Purpose of the article: The article is devoted to the assessment of the fiscal and economic consequences of changes in oil prices in the world market, as well as the study of the relationship between state budget revenues and government expenditure in Azerbaijan. It was revealed that a 1% increase in oil prices, in the long run, increased Azerbaijan’s GDP by 0.52% and state budget expenditures by 0.88%. The calculations allow to conclude that there is a high correlation between government spending and state budget revenues in Azerbaijan. The obtained result indicates a positive relationship between the aforementioned economic variables. Methods: The most common method of analyzing the possible causal relationship between macroeconomic indicators is the causality test proposed by Granger in 1969. However, from a methodological point of view, the application of this test to study the causal relationship between economic indicators requires these indicators to be stationary. This statistical feature can be violated in the case of the economic indicator having the single root elements. To do this, we tested the Unit root problem of the variable using the Augmented Dickey-Fuller test. Simultaneously, a number of other important features of the evaluated models were tested and the adequacy of the models was confirmed. Findings & Value added: As a result of the research, it was determined that there is a short-term and long-term causal relationship between world oil prices and Azerbaijan’s GDP and state budget expenditures. According to the results, a 1 percent increase in oil prices leads to the increase of the current level of GDP growth in Azerbaijan by 0.20 percent in the short term, and by 0.52 percent in the long term. Parallelly, it was revealed that a 1 percent increase in world oil prices leads to a 0.88 percent increase in Azerbaijan’s state budget expenditures in the long run. The correlation between Azerbaijan’s government expenditures and state budget revenues was analyzed, and a high correlation between these two macroeconomic indicators was identified.

show abstract

How Fiscal Policy Affects Non-Oil Economic Performance in Azerbaijan?

Cited by 11 publications

References 33 publications

The impact of oil price changes on selected macroeconomic indicators in Azerbaijan

The impact of oil price changes on selected macroeconomic indicators in Azerbaijan

Analysis of the Responsiveness of Non-Oil Exports to Fiscal and Monetary Policy Actions

Fiscal policy and oil factor: Evaluation of the effects in global economic development

Contact Info

Product

Resources

About