Page 33 - Azerbaijan State University of Economics
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THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.80, # 2, 2023, pp. 28-46
It is well known that Azerbaijan's economy, particularly its industrial sector, is heavily
influenced by the oil factor. But in the present day, on the edge of a new industrial
revolution characterized by the widespread application of advanced technology, the
issues of ending reliance on oil and modernizing the Azerbaijani economy have taken
on much greater significance.
In various studies, issues such as analysis of the results of measures implemented for
the development of non-oil industry (Amin, 2022), directions for achieving the
development of the industrial regions (Yahyayeva, 2018), modern situation of
industrial parks, industrial districts of technoparkaks ((Arif, 2016), directions for the
improvement of the food industry (Guliyev and Abutalibov, 2016) in Azerbaijan were
analysed. In the research by Jahangirov (2022), on the eve of the new industrial
revoultion the problems of the modernization of the Azerbaijan industry were
examined, and it is emphasized that to ensure flexible transformation of Azerbaijani
industry, special attention should be paid issues like implementing major economic
projects to ensure the flexible transformation of the Azerbaijan industry, urgent
measures should be implemented, the structure of the industry should be analyzed,
problem areas should be revealed in time and more effective tools should be used. In
this regard, in our study, the effects of investments in this sector and its mutual
relations with the rest of the economy were evaluated in order to determine problems
in the industry and create development prospects.
It is better to use economy-wide modeling rather than partial-equilibrium analysis to
examine the growth and distributional implications of different development routes.
The latter leaves out a great deal of significant elements, many of which are hard to
predict and that work simultaneously and interactively. Numerous economic sectors
have significant interactions that affect the direction and strength of policy effects,
according to quantitative studies on the macro and distributional effects of
development programs (Bautista et al., 1999). To estimate economy-wide effect of a
sector, multiplier models and CGE models are widely used in the literature (Mustafaev
and Naydenov, 2021; Zhang et al., 2020; Garza-Gil et al., 2017; Nejati and Bahmani,
2020; Kat et al., 2018). (Kyophilavong, 2016) investigates the impact of the mining
sector on the Laos’ economy using CGE model and it finds that higher capital stock
and productivity lead to increased value added, production, exports and investment in
the mining sector and these increases result in higher real gross domestic product,
exports and investment.
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