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Yadulla Hasanli, Gunay Rahimli: Assessment of The Multiplicative Effects of The Mining and
Manufacturing Sectors nn Azerbaijan
However, the effects from the associated Dutch disease negatively impact real
production and value added in the agriculture and industry. (Fatah, 2008) uses a Social
Accounting Matrix (SAM) to analyze the impact of the coal mining industry on the
economy and to do simulations to find alternative policies on the coal industry that
are suitable for economic improvement and environmental sustainability.
For Azerbaijan economy, the impact of various sectors on the economy was evaluated
based on the multiplier based on the expenditure-output model and the Social
Accounts matrix (Sadik-Zada et al., 2021; Hasanli et al., 2019; Rahimli and
Mammadova, 2022). (Hasanli and Rahimli, 2023) estimates and compares the
country-wide effect of investments in each sector using both models. In this article,
we will evaluate the additional demand created by the increase in demand for the
products of the mining and manufacturing sectors in these sectors, in other sectors and
in the country as a whole. Also, the analysis of these demand volumes helps to reveal
the problems in these sectors.
METHODOLOGY
The relationships between the various economic sectors are displayed in the input-output
table. Thus, each sector uses production elements and intermediate consumption products
from other sectors to generate its own output, which it then sells to consumers as a final
good and to other sectors as an intermediate product. The input-output table (Table 1)'s
rows and columns, respectively, represent this process (Greton, 2013).
Table 1: Input output table
Output Intermediate demand Final demand Output
Input Sector 1 Sector 1 Sector 2 Sector 3 Y1 X1
x11
x11
Intermediate demand Sector 2 x11 x11 x11 Y2 X2
x11
x11
x11
X3
Y3
x11
Sector 3
Value Added V1 V2 V3
Input X1 X2 X3
The entire output of each sector can be seen by examining the rows of the input-output
table, which sums the intermediate and final consumption. Then input-output table's
main equation can be written as follows (Hasanli, 2011):
X=AX+Y (1)
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