Fiscal policy effectiveness and risks in the development of Azerbaijan’s economy during economic shock

Abstract

The study aimed to empirically evaluate the effectiveness of fiscal policy in the context of the economic slowdown in Azerbaijan caused by the COVID19 pandemic. Using the Granger test, causal relationships between fiscal indicators and indicators of macroeconomic development in Azerbaijan have been determined. Presented an integrated assessment of the development of the national economy under the influence of the fiscal policy in the country. Using the regression analysis, fiscal risks have been identified that have a destabilizing effect on the economy and aggravating its state during a period of economic shock in the short term. The hypothesis about the different influence of the values of the public expenditure multipliers on the economy, depending on their functional directions, has been confirmed. The structure of expenses of the state budget of Azerbaijan has been empirically optimized, increasing production expenses.

Covid-19 Pandemisi Sırasında Stratejik Yönetim Literatüründe Neler Söylendi?

“…When severe decreases in growth rates of countries, scarcity in resources, increasing inflation, and unemployment in many countries are considered, it is logical to see attempts to understand the impacts of macroeconomics on organizations. In this sense, trade flows (Megits, et al, 2020), trade policy responses (Curran, et al, 2021), trading behavior (Khanthayit, 2020), fiscal policy (Guliyeva, et al, 2021), overcoming economic downturns (Eggers, 2020), export and economic diversification (Yasmin, et al, 2020), Indian economy (Barbate, et al, 2021) and state support for key sectors of the economy (Radchenko, et al, 2020) was examined. Limited to the articles in the sample, it can be recommended to concentrate on foreign direct investment opportunities for a postpandemic period for future research.…”

Dutch disease-led de-industrialization in the Azerbaijan’s economy

“…Moreover, Guliyeva et al (2021) claimed that oil revenues and government spending in Azerbaijan's state budget are strongly linked to oil prices, resulting in inefficient and procyclical fiscal policies.…”