9 research outputs found
The Impact of Oil Prices on State Budget Income and Expenses: Case of Azerbaijan
Since Azerbaijan is one of the oil exporting countries, its macroeconomic indicators, especially the exchange rate, the state budget are highly dependent on the oil factor. This study assessed the role of oil in the economy and the impact of the oil factor on the revenues and expenditures of the state budget of Azerbaijan in manat and dollar terms. The study covers the period 2005m03 â 2022m05. Unit root (Augmented DickeyâFuller (ADF), PhillipsâPerron (PP) and KwiatkowskiâPhillipsâSchmidtâShin (KPSS)) tests were applied to check the stationarity of variables (time series). ARDL was applied as a research method. In terms of the reliability of the obtained results, the error correction model (ECM) was used, standard tests were carried out, and the joint integration methods of FMOLS, DOLS and CCR were also applied in the evaluation. EngelâGranger and PhillipsâOuliaris tests have been used to test for cointegration interactions between variables. Shortâterm, longâterm, and strong associations between variables were also calculated. The results of the study showed that the state budget depends on the oil and gas sector, and fluctuations in world oil prices functionally and along the chain affect oil revenues and the state budget. A different impact of oil prices (oil revenues) on the state budget in terms of manat and dollar was the devaluation of the manat, which was carried out to reduce the impact of the global financial and economic crisis on Azerbaijan. The general conclusion of the study was a recommendation to further accelerate work on the diversification of the economy and the development of the nonâoil sector. The results of the conducted research can serve as a scientific basis for the economic policy of the state aimed at reducing the impact of external oil price shocks on the economy of Azerbaijan and other similar oilâexporting countries, including on the state budget, and diversifying the economy. The functional dependencies of the income and expenses of the state budget in terms of manat and dollar on world oil prices are given below
The Impact of Oil Factor on Azerbaijan Economy
The paper examines the role of oil in the world economy and its impact on Azerbaijan economy. The reciprocal relations between factors in research were carried out by differential model of time series and times series have been checked whether they are unit root (Augmented Dickey-Fuller (ADF), Phillips-Perron (PP) and Kwiatkowski-Phillips-Schmidt-Shin (KPSS) as a methodology of the research. The research focused on the econometric analysis through traditional methods and statistics like EVIEWS 9, GRETL, PASW Statistics. The results confirm that the formation of demand and supply didn't happen in the world market during 15-20 years. The relationships between oil prices and demand and supply prove the novelty of the research. The impact of oil price fluctuations on âeconomic conceptâ was high in 2007-2009 and 2014-2016. The practical importance of the article is the employment of the income ââŹâ generated from âthe contract of the centuryâ ââŹâ for the human development.
Keywords: Economic Development, Oil Prices, Econometric Analysis, Functional Dependence, Macroeconomic Indicators
JEL Classifications: E31, F31, Q41
DOI: https://doi.org/10.32479/ijeep.800
The impact of economic growth on the ecological environment and renewable energy production : evidence from Azerbaijan and Hungary
This article reflects on the necessity of employing renewable energy sources in the modern
era to mitigate the negative environmental impact caused by traditional energy sources and address
environmental pollution. Through research conducted in Azerbaijan and Hungary, it analyses the
influence of economic growth on the ecological environment and renewable energy production. Due
to limitations in the general dataset, the study considers the period of 1997â2022 for CO2 emissions
causing environmental pollution, 2007â2022 for renewable energy production in Azerbaijan, and
2000â2021 for the same in Hungary. Information regarding wind and solar energy in Azerbaijan has
been available since 2013. Temporal sequences have been utilised in the research, employing Augmented DickeyâFuller and PhillipsâPerron (PP) unit root tests to examine the stationarity of the
time series. An Autoregressive Distributed Lag (ARDL) model has been constructed, and the credibility of the model has been verified using Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), and Canonical Cointegrating Regression (CCR) models. The
findings reveal that in Azerbaijan, the long-term impact of economic growth on hydro-energy has
been negative, while dependence on biomass and waste has been insignificant but positive. The
influence on wind and solar energy production has also been negative and insignificant, akin to
hydro-energy production. However, energy supply from renewable sources has been positively affected by the aggregate indicator of economic growth, albeit insignificantly. The impact of economic
growth on carbon dioxide has been significant in two magnitudes, whereas in other cases, it has
been insignificant but positive. In Hungary, economic growth has positively affected renewable energy production. However, the impact on carbon dioxide has been negative, meaning that this indicator has decreased as economic growth has increased. The study concludes that the impact of
economic growth on indicators of both countries has been more effective in Hungary, which can be
attributed to economic development.peer-reviewe
Analysis of the Main Social Macroeconomic Indicators of the Population During The oil Boom in Azerbaijan
Indicators directly related to the economies of oilâexporting countries, and especially the socioâeconomic wellâbeing of the population, depend on the resource potential and prices for resources of these countries. The income of the population, their average monthly salary, the average amount of monthly pensions, the average amount of oldâage pensions, the average amount of disability pensions, the amount of pensions for the loss of the head of the family form the basis of the state of financial wellâbeing. Taking them as a basis, we completed the goal of our research by constructing models that determine the dependence of the main indicators of the socioâeconomic and, of course, material wellâbeing of the population of Azerbaijan on world oil prices. The study covers the years 1997â2022. The  and  models are adapted to determine longâterm and shortâterm levels of these indicators, taking into account world oil prices. According to the results, a high level of coâintegration relationship with world oil prices and socioâeconomic indicators of the population is noted. This has also been proven in the short term. Thus, the alternative , , , and models used to validate these results further demonstrated the importance of these interactions. Moreover, the study also conducted a combined BayerâHank coâintegration test. But the results turned out to be somewhat different. The results of this study can be taken into account to one degree or another in the socioâeconomic policy of the state in Azerbaijan
How Oil Price Changes Affect Inflation in an Oil-Exporting Country: Evidence from Azerbaijan
This research study aims to explore the inflationary effects of oil price rises in the case of Azerbaijan. The study covers 1997â2021 yearly data to estimate long- and short-term impacts while considering âoil priceâmoney supplyâ interactions. Autoregressive Distributed Lag Bounds testing (ARDLBT), Fully Modified Ordinary Least Squares (FMOLS), and Canonical Cointegration Regression (CCR) cointegration methods are applied simultaneously. The research findings are: (1) oil price is a significant long-term determinant of inflation in Azerbaijan, affecting overall prices directly and indirectly via the money supply; (2) the effect is statistically significant in the short-term and happens indirectly, moderated by the money supply; and (3) oil price moderates the impact of the money supply over inflation in the short-term. A major limitation of the current study is that it omits the possible moderation impact of oil prices over inflation in Azerbaijan through the resulting inflationary pressure due to oil price rises in trade-partner countries and the governmentâs fiscal policy. Research findings require the Central Bank to consider indirect effects of oil price changes, especially due to money supply changes, when targeting inflation and addressing policy sustainability in Azerbaijan
Do High Oil Prices Obstruct the Transition to Renewable Energy Consumption?
The study analyzes the impact of economic growth, carbon dioxide (CO2) emissions, and oil price on renewable energy consumption in Azerbaijan for the data spanning from 1992 to 2015, utilizing structural time series modeling approach. Estimation results reveal that there is a long-run positive and statistically significant effect of economic growth on renewable energy consumption and a negative impact of oil price in the case of Azerbaijan, for the studied period. The negative impact of oil price on renewable energy consumption can be seen as an indication of comfort brought by the environment of higher oil prices, which delays the transition from conventional energy sources to renewable energy consumption for the studied country case. Also, we find that the effect of CO2 on renewable energy consumption is negative but statistically insignificant. The results of this article might be beneficial for policymakers and support the current literature for further research for oil-rich developing countries
The Financial Development-Renewable Energy Consumption Nexus in the Case of Azerbaijan
This article analyzed the relationship between financial development, renewable energy consumption, economic growth, and energy prices in Azerbaijan by employing time series data for the time span of 1993–2015. The autoregressive distributed lagged (ARDL) technique was applied in empirical estimations, because it performs better than all the alternative techniques in small samples, which was the case here in this article. The results of estimation found that there is a positive and statistically significant influence of financial development and economic growth on renewable energy consumption, whereas the prices of energy proxied by CPI have an adverse impact on renewable energy consumption in Azerbaijan. Also, estimation results demonstrated that a 1% rise in financial development, proxied by domestic credit as a percentage of GDP, and economic growth increase renewable energy consumption by 0.16% and 0.60%, respectively. The different financial development impacts on renewable energy consumption and related policy implications were also introduced
The Impact of Oil Exports on Imports of Agricultural Machinery and Equipment
The influence of the main export product on the main import product is the focus of any country. In this regard, since oil and oil products are the main export commodity of Azerbaijan, their impact on the import of machinery and equipment necessary for the development of the agricultural and agro âprocessing industries, which are the main imported products, was chosen as the subject of study. The purpose of the article was to assess the impact of the export of oil and oil products on the import of machinery and equipment necessary for the development of the agricultural sector and the agro âprocessing industry. The study used data for the period from 1999 to 2020. ARDL and ECM methods were applied and compared with FMOLS, DOLS and CCR as a validation. During the study, 9 hypotheses were proposed. All hypotheses have been proven to some extent. The results of the study show that, like all industries, the agricultural sector depends on the oil factor. Thus, the export of oil to the republic has a positive effect on imports and, of course, on the imports of many machineries and equipment necessary for the development of the agricultural sector, especially agricultural machinery for tillage and harvesting, equipment for the food industry and equipment for processing agricultural products. The overall result of the research was a recommendation to further acceleration of work aimed at diversifying the economy and developing the non âoil sector, similar to the results of other similar studies (researches investigating resource âexporting economies)