Page 40 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.72, # 2, 2015, pp. 32-42

Results and Implications
The generated macroeconomic consequences of WTO accession for the
Azerbaijani economy based on the results of our model. According to the results,
WTO accession will exert a positive impact on all three measures of general welfare,
i.e. income, consumption and aggregate savings. Both income and aggregate savings
are forecasted to increase by approximately 11 percent in case Azerbaijan joins the
World Trade Organization. Most interestingly, consumption is predicted to increase
by a stunning 93 percent compared to the benchmark value. Our analysis suggests
that households would be the primary beneficiaries of WTO accession [4].
Table 7. Macro Indicators
Income 0,97164 1,07912 11,06
Consumption 0,39755 0,76869 93,36
Aggregate Savings 0,20388 0,22564 10,67
Source: The State Statistics Committee of Azerbaijan and Author‟s calculations, 2015

Table 16 shows the likely results of WTO accession on other macroeconomic
indicators, i.e. government savings, tax revenue, exports and imports. Exports are
forecasted to decrease by 68 percent compared with a relatively modest increase in
imports of 3 percent. Although revenues through customs and tariffs are likely to drop
after WTO accession, tax revenue is projected to increase by 17 percent due to higher
levels of consumption and increased household incomes. The results implicate that
Azerbaijani exports will plummet in the case of WTO accession which is likely to
trigger wide ranging consequences for the Azerbaijani oil industry. [3]
Table 8. Macro indicators, continued
Government Savings 0.03694 0.03811 3.17
Tax Revenue 0.12952 0.15101 16.59
Exports 0.56566 0.17953 -68.26
Imports 0.26491 0.27225 2.77

Source: The State Statistics Committee of Azerbaijan and Author‟s calculations, 2015

Implications
As the result of our model, we can state that consumers in the domestic
markets will enjoy lower prices, among other, due to reduced import tariffs from
Azerbaijan‟s accession to the WTO. The consumption will be stipulated by the

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