Page 37 - Azerbaijan State University of Economics
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THE                      JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.80, # 2, 2023, pp. 28-46

                    DATA
                    The  2016  input-output  table  was  used  as  the  input-output  model's  database.  A
                    simulation model was constructed based on the table, which had 96 sectors, but was
                    reduced  to  25  primary  sectors  by  grouping  appropriate  areas.The  database  of  the
                    multiplier model based on the SAM is the social accounting matrix built by adding
                    production factors, households, government, enterprises, investment/savings and rest
                    of the world accounts to the input-output table for the year of 2016.

                    FINDINGS
                    Firstly, in the article, using simulation equations (3) and (6), the multiplier effects of
                    the 1 million manat investment in the Mining sector have been evaluated through the
                    multiplier models based on the input-output table and the social accounting matrix,
                    and the results of both models are reflected in table 3.

                    The third column of the table shows the results of the assessment based on the input-
                    output model. It can be seen from the results that 1 million manat investment allocated
                    to the mining sector creates a demand for the total output of about 1.2 million manat
                    in the country. The largest part of this demand - 1.08 million manats is for the output
                    of the mining sector itself, and the remaining 0.12 million manats is for the output of
                    other sectors of the country's economy. This shows that the mining sector has very
                    weak connections with other sectors of the country's economy. The reason for this is
                    that this sector mainly includes of the oil and gas sector, and oil and gas are mostly
                    exported in the form of raw materials, and as a result, less intermediate products are
                    bought from other economic activities. In general, it can be seen that the increase in
                    the  demand  for  the  production  of  the  mining  sector  by  1  million  manats  creates
                    demand of 25 thousand manats for the products of the ‘Production of non-metallic
                    products  and  base  metals’  sector,  14.5  thousand  manats  for  the  products  of  the
                    ‘Production of machinery, equipment, furniture’ sector, 12 thousand manats for the
                    products  of  the  ‘Transport  and  warehousing’  sector,  10.8  thousand  manats  to  the
                    ‘Professional  and  technical  activities’  sector.  Because  the  mining  sector  uses  the
                    intermediate  products  of  other  sectors  when  orginizing  its  production.  There  is  a
                    demand for the products of these sectors to some degree. However, as we mentioned,
                    only production relations are taken into account here. Thus, when the demand for the
                    product of the mining sector increases, it is clear that this sector buys intermediate
                    products from other sectors, which is called the direct effect. Also, in order to produce
                    the additional output volume of these sectors, their demand for the products of other
                    sectors also increases.






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