Page 41 - Azerbaijan State University of Economics
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THE                      JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.80, # 2, 2023, pp. 28-46

                    The use of more imported products as intermediate products in the production of this
                    sector also plays a role in obtaining this result. On the other hand, since the level of
                    value added, including profit, wages in agriculture is low, these factors can increase
                    the demand for products of other sectors at a low level. As a result, the multiplicative
                    effects of expenditures  on the basis of SAM in the agriculture are lower than the
                    multiplicative effects based on the input-output model. In Table 5, the multiplicative
                    effects of the creation of an additional demand of 1 million manats for the products of
                    the ‘Production of non-metallic products and base metals’ sector have been evaluated
                    for the country. As can be seen, according to the results of the input-output model, the
                    investment of 1 million manats in this sector increases the total output of the country
                    by 1.9 million manats due to production relations. 1.26 million manats of this increase
                    is in this sector itself, and the rest is in other sectors. The 2nd sector with the highest
                    impact  is  ‘Mining  industry’.  Thus,  the  investment  of  1  million  manats  in  the
                    ‘Production of non-metallic products and base metals’ creates an additional demand
                    of 248 thousand manats for ‘Mining industry’ products across the country.

                    This is due to the fact that the products of that field are used as intermediate products
                    in the production of non-metallic products and base metals and in the production of
                    other sectors from which it receives its intermediate products. The lowest price of
                    impact was recorded in areas such as ‘Education’, ‘Healthcare’, ‘Services of library,
                    archive,  museum  and  other  cultural  institutions’,  ‘Social  services’,  ‘Rest,
                    entertainment, art services’, ‘Public administration and defense’, and the additional
                    demand in these areas is less than 500 manats. Looking at the SAM-based multiplier
                    model, we can see that for this sector also the result of this model is lower than the
                    result of the io model (1.6 million manats). The reason for this is that this sector is
                    highly dependent on imports.

                    Thus,  the  creation  of  an  additional  demand  of  1  million  manats  for  non-metallic
                    products and base metals requires an increase of 1.3 million manats in the output of
                    this field due to production relations. However, the result of the SAM-based model
                    shows that this increase is 1.1 million manats. This means that the corresponding
                    demand for the part that arose as a difference was due to the fact that imports exceeded
                    exports and the value added rate was at a low level. For comparison, let's note that the
                    rate of value added in the ‘Mining’ sector is 0.87, while in the Production of non-
                    metallic products and base metals' sector it is 0.4.








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