Open AccessFiscal policy effectiveness and risks in the development of Azerbaijan’s economy during economic shock
Author(s) -
Shafa Guliyeva,
Nushaba Gadimli,
Yalchin Azizov,
Zaur Hajiyev,
Sanan Bayramov
Publication year - 2021
Publication title -
journal of eastern european and central asian research
Language(s) - English
Resource type - Journals
eISSN - 2328-8280
pISSN - 2328-8272
DOI - 10.15549/jeecar.v8i2.710
Subject(s) - economics , fiscal policy , shock (circulatory) , context (archaeology) , macroeconomics , production (economics) , economic policy , economy , medicine , paleontology , biology
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.