ABSTRACT
In the article, the multiplicative effects of the mining and manufacturing sectors of the Azerbaijani economy have been evaluated and the results have been compared. For this purpose, using the input-output model and multiplier model based on the social accounting matrix (SAM) for the year of 2016, the impact of the increase in demand in these sectors on the demand in these sectors themselves and in the others was evaluated. The result of the study showed that although the effects of the manufacturing industry are high when production relations are considered, the impact of the manufacturing industry on the economy is not as high as expected since some part of the financial resources flows abroad due to the import. And since the mining industry is less connected with the sectors of the countrys economy (more precisely, due to the low share of intermediate consumption in the production volume), the input-output multiplier of this sector is small compared to the manufacturing industry, but the SAM multiplier is significantly higher. It should be noted that, because there are more accounts in SAM compared to input-output tables, in the multiplier model based on SAM, the effect of other accounts, including wages, capital costs, on demand growth in other sectors is also added. However, this positive difference may not be attributed to all sectors. So, in sectors with a negative balance in the accounts, for example, in sectors where imports exceed exports, SAM multiplier is usually smaller than the input-output multiplier. The results of the study contribute to the identification of problems of industry in oil-rich countries and can be used in decision-making as well.

Keywords: manufacturing, multiplier effects, oil-rich countries, input-output model, SAM

Jel Classification: C63, D58, E17