Page 33 - Azerbaijan State University of Economics

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

Analysis of and research on macroeconomic processes using growth models helps to
evaluate the results of the economic activity, eliminate negative events, develop
economic policy and make predictions based on economic theories. Economic
growth is a part of the economic development processes.

2. THEORETICAL-METHODOLOGICAL ASPECTS
The development of modern economic growth models is primarily based on the use
of mathematical and statistical methods. The indicators are aggregated, and the
economy is analyzed in the form of a single organism. Thus, the economic growth
reflects the amount and the share of the country's gross domestic product for a
certain period of time.

Economic stability is reflected in the economic functions of the state. The
achievement of economic stability means achieving economic growth and reducing
unemployment. Researchers have tried to identify the driving forces behind the
development of countries around the globe and understand differences in their
development using economic growth models. In economic literature, the economic
growth models are classified on a variety of bas [http://www.undp.org/content/
dam/azerbaijan/docs/publications/sustainabledevelopment/]. Generally, they are
grouped into two major categories, namely traditional economic growth models and
modern economic growth models [Taban, S. 2008]. Traditional economic growth
models include classic economic growth models (Smith, Malthus, Ricardo) and
models named after Karl Marx, Joseph Schumpeter and John Meynard Keynes.
Modern economic growth models include neo-Keynesian economic growth models
(Harrod-Domar economic growth model, Samuelson-Hickson multiplier, and
accelerator model) and neo-classical economic growth model (Solow model). The
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 examine the causes and outcomes of events emerging in the
economy. The long term economic growth models study the components and ways
of sustaining economic growth.

If the steady-state growth in a number of economic growth models is explained
using exogenous factors, then in Romer's and Lucas's models the economic growth
has been modeled endogenously on the basis of technology and innovation. These
models, along with the short-term analysis and forecasting, have enabled us to
explore long-term economic fluctuations.

The fluctuations in the economic growth and its continuing prolongation led to the
creation of the first long-term, wavelike economic growth model of English

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