Open AccessAhmadov V.
Author(s) -
Vusal Ahmadov
Publication year - 2022
Publication title -
interconf
Language(s) - English
Resource type - Journals
ISSN - 2709-4685
DOI - 10.51582/interconf.19-20.02.2022.001
Subject(s) - economics , fiscal policy , exchange rate , oil boom , fiscal sustainability , investment (military) , economic policy , shock (circulatory) , dutch disease , monetary economics , government revenue , government spending , revenue , macroeconomics , finance , market economy , medicine , welfare , politics , political science , law
This paper evaluates the financial policy of oil-exporting Azerbaijan in the recent oil boom and bust period. Analysis of fiscal policy evaluates the fiscal sustainability and efficiency of government spending to upgrade domestic economy. Monetary policy evaluation measures the effect of the exchange rate policy on competitiveness of non-oil economy and capacity of Azerbaijan government to sustain macroeconomic stability in the oil-shock period. The share of the oil revenue in government budget increased significantly, and budget spending is directed to physical investment while investment in human capital in the form of health, education and social spending lagged behind. Aside from currency crises in 2015, macroeconomic stability has been under control, but fixed exchange rate policy impeded the competitiveness of non-oil sector and caused Dutch disease.