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Analysis of Cyclicality in the Azerbaijan Economy: Results of the Chi-Square Test

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  • Ibrahim Niftiyev
  • Natavan Namazova

Abstract

This study investigates the cyclical association between gross domestic product (GDP), monetary variables, international trade and foreign directed investments (FDI), and annual average oil prices (BRENT trademark) as explanatory variables in the Azerbaijan economy. The research methodology utilized a chi-square test of independence and goodness of fit test. The crosstabulation analysis used the nominal variables "increased" and "decreased" years, which refer to the transformation of the time series, mainly between 1991 and 2019. The results of the independence test demonstrated a statistically significant association between GDP, GDP per capita in current prices, international trade, FDI, and oil prices. However, the monetary indicators of economic growth, real GDP variables, and trade balance did not exhibit the same pattern. The results of the goodness of fit test showed a non-random deviation from the expected increased and decreased year in terms of GDP indicators and imports. This research is topical in light of the sharp oil price slump of 2020, which is reminiscent of the 2014–2015 downturn in commodity prices.

Suggested Citation

  • Ibrahim Niftiyev & Natavan Namazova, 2020. "Analysis of Cyclicality in the Azerbaijan Economy: Results of the Chi-Square Test," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 6(2), pages 122-134, June.
    • Handle: RePEc:khe:scajes:v:6:y:2020:i:2:p:122-134
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    Cited by:

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    2. Izabela Jonek-Kowalska & Marian Turek, 2022. "The Economic Situation of Polish Cities in Post-Mining Regions. Long-Term Analysis on the Example of the Upper Silesian Coal Basin," Energies, MDPI, vol. 15(9), pages 1-21, April.
    3. Niftiyev, Ibrahim, 2021. "Performance Evaluation of the Fruit and Vegetable Subsectors in the Azerbaijani Economy: A Combinatorial Analysis Using Regression and Principal Component Analysis," EconStor Conference Papers 235494, ZBW - Leibniz Information Centre for Economics.
    4. Katarzyna Czech & Ibrahim Niftiyev, 2021. "The Impact of Oil Price Shocks on Oil-Dependent Countries’ Currencies: The Case of Azerbaijan and Kazakhstan," JRFM, MDPI, vol. 14(9), pages 1-14, September.

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    More about this item

    Keywords

    Azerbaijan economy; macroeconomic data; business cycles; boom and bust; frequency analysis;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions

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