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The Impact of Oil Prices on the Capital Expenditures of the State Budget in Azerbaijan

Author

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  • Baghish Ahmadov

    (Department of Economy and Technological Sciences, International Magistrate and Doctorate Center, Azerbaijan State University of Economics (UNEC), Baku, Azerbaijan.)

Abstract

The article studies the theoretical and practical approaches related to the allocation of oil revenues for public investment. Based on the two-step Engel-Granger procedure for cointegration analysis, the relationship between the ratio of the capital expenditures of the state budget to non-oil GDP and the logarithm of real oil prices in Azerbaijan is investigated. It has been determined that public investment in Azerbaijan is highly dependent on the oil price, and the volatility of the oil price also affects the volatility of these expenditures. So, it was proposed that the capital expenditures of the state budget should be determined based on the goals of economic development, and not depending on changes in oil prices.

Suggested Citation

  • Baghish Ahmadov, 2022. "The Impact of Oil Prices on the Capital Expenditures of the State Budget in Azerbaijan," International Journal of Energy Economics and Policy, Econjournals, vol. 12(6), pages 383-388, November.
    • Handle: RePEc:eco:journ2:2022-06-47
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    References listed on IDEAS

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    1. Maria A Albino & Svetlana Cerovic & Francesco Grigoli & Juan C Flores & Javier Kapsoli & Haonan Qu & Yahia Said & Bahrom Shukurov & Martin Sommer & SeokHyun Yoon, 2014. "Making the Most of Public Investment in MENA and CCA Oil-Exporting Countries," IMF Staff Discussion Notes 14/10, International Monetary Fund.
    2. Ms. Maria A Albino & Ms. Svetlana Cerovic & Mr. Francesco Grigoli & Mr. Juan C Flores & Mr. Javier Kapsoli & Mr. Haonan Qu & Mr. Yahia Said & Mr. Bahrom Shukurov & Mr. Martin Sommer & Mr. SeokHyun Yoo, 2014. "Making the Most of Public Investment in MENA and CCA Oil-Exporting Countries," IMF Staff Discussion Notes 2014/010, International Monetary Fund.
    3. Rabah Arezki & Kirk Hamilton & Kazim Kazimov, 2011. "Resource Windfalls, Macroeconmic Stability and Growth: The Role of Political Institutions," CESifo Working Paper Series 3678, CESifo.
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    Cited by:

    1. Baghish Ahmadov, 2024. "The Impact of Oil Prices on the Import of Capital Goods in Azerbaijan," International Journal of Energy Economics and Policy, Econjournals, vol. 14(3), pages 512-517, May.

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    More about this item

    Keywords

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    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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