Page 31 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.76, # 2, 2019, pp. 31-45

THE OIL BOOM IN AZERBAIJAN AND MODELING OF ECONOMIC
GROWTH IN POST-OIL ERA

TURAJ MUSAYEV 1
1 Researcher, Institute of Economics of Azerbaijan National Academy of Science,
Institute of Control Systems of ANAS 115 H. Javid Ave., Baku, AZ1143, Azerbaijan
e-mail: [email protected]

Received 30 January 2019; accepted 24 May 2019; published online 27 December 2019

ABSTRACT
The objective of this research is to assess the oil boom and stable economic growth for
post-oil era taking into account the existing realities of Azerbaijan. Economic stability is
reflected in the economic functions of the state. Achieving economic stability means
achieving economic growth and reducing unemployment. Researchers have tried to
explain the reasons behind the development of countries in the world and to understand
the differences in development using economic growth models. In economic literature,
economic growth models are classified on a variety of basis [http://www.undp.
org/content/ dam/azerbaijan /docs/publications/ sustainable development/]. The models
are classified into two major groups, namely traditional economic growth models and
modern economic growth models [Taban, S. (2008)]. Traditional economic growth
models are, in essence, divided into classical models of economic growth (Smith,
Malthus, Ricardo) and models named after Karl Marx, Joseph Schumpeter, John
Meynard Keynes. Modern economic growth models are based on neo-Keynesian
economic growth models (Harrod-Domar economic growth model, Samuelson-Hickson
multiplier, and accelerator model) and neo-classical economic growth model (Solow
model). Economic growth models are also characterized by their other features. As
macroeconomics is divided into two major parts, modern economic growth models are
also divided into two parts: Short-Run and Long-Run [Andrew B. Abel, Ben S.
Bernanke, 2008]. In the short term, economic growth models study the causes and
outcomes of emerging economies and the components of sustainable economic growth.
Long-term models study the causes of equilibrium in the long run. In this research, the
equilibrium state of the economic growth was assessed for Azerbaijani conditions. The
marginal propensity to consume and invest, as well as marginal productivity of capital
was determined in real terms. Then, the sustainable growth rate of the economy for the
post-oil era was determined. Thus, economic growth problems in Azerbaijan were
studied for the post-oil era on a scientific basis. This research is aimed to contribute to
improving the effectiveness of the country's macroeconomic policy.

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