The Impact of Oil Price Shocks on National Income: Evidence from Azerbaijan

Shahriyar Mukhtarov (), Sugra Humbatova, Mubariz Mammadli and Natig Gadim‒Oglu Hajiyev
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Sugra Humbatova: Department of Economics and Management, Azerbaijan State University of Economics (UNEC), Istiqlaliyyat Str. 6, Baku AZ1001, Azerbaijan
Mubariz Mammadli: Department of Economy and Business Administration, Azerbaijan State University of Economics (UNEC), Istiqlaliyyat Str. 6, Baku AZ1001, Azerbaijan
Natig Gadim‒Oglu Hajiyev: Department of Regulation of the Economy, Azerbaijan State University of Economics (UNEC), Istiqlaliyyat Str. 6, Baku AZ1001, Azerbaijan

Energies, 2021, vol. 14, issue 6, 1-11

Abstract: This study investigates the influence of oil price shocks on GDP per capita, exchange rate, and total trade turnover in Azerbaijan using the Structural Vector Autoregressive (SVAR) method to data collected from 1992 to 2019. The estimation results of the SVAR method conclude that oil price shocks (rise in oil prices) affect GDP per capita and total trade turnover positively, whereas its influence on the exchange rate is negative in the case of Azerbaijan. According to results of this study, Azerbaijan and similar oil-exporting countries should reduce the dependence of GDP per capita, the exchange rate, and total trade turnover from oil resources and its prices in the global market. Therefore, these countries should attempt to the diversification of GDP per capita, the exchange rate, and other sources of total trade turnover.

Keywords: oil price; income; energy price; SVAR; Azerbaijan (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jeners:v:14:y:2021:i:6:p:1695-:d:519764

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