This article analyzed the relationship between financial development, renewable energy consumption, economic growth, and energy prices in Azerbaijan by employing time series data for the time span of 1993–2015. The autoregressive distributed lagged (ARDL) technique was applied in empirical estimations, because it performs better than all the alternative techniques in small samples, which was the case here in this article. The results of estimation found that there is a positive and statistically significant influence of financial development and economic growth on renewable energy consumption, whereas the prices of energy proxied by CPI have an adverse impact on renewable energy consumption in Azerbaijan. Also, estimation results demonstrated that a 1% rise in financial development, proxied by domestic credit as a percentage of GDP, and economic growth increase renewable energy consumption by 0.16% and 0.60%, respectively. The different financial development impacts on renewable energy consumption and related policy implications were also introduced.

The research examines the role of oil in the world economy and the evaluation of the oil factor in the economy of Azerbaijan. The error correction model (ECM) has been used in terms of reliability of the obtained results, and assessment has been done by the FMOLS, DOLS and CCR co-integration methods. Engel-Granger and Phillips-Ouliaris co-integration tests have been used for checking the co-integration relations among variables. Times series have been checked whether they are unit root (Augmented Dickey-Fuller (ADF), Phillips-Perron (PP) and Kwiatkowski-Phillips-Schmidt-Shin (KPSS) as a methodology of the research. The results of the research reveal that daily oil production and consumption have less effect on the formation of the world oil prices. On the other hand, the impact of the world GDP and world industry production volume is a bit more. Generally, the influence of these factors on oil market has been reduced gradually. However, the reverse process is observed during the analysis of the influence of oil production and oil price on the main indicators of Azerbaijan and Kazakhstan. Therefore, Azerbaijan and Kazakhstan are an oil-exporting countries which is why their macroeconomic indicators, especially currency, GDP and DNP, heavily depends on the oil factor. The research has been limited but highlights the obtained results to some problems and this must be considered as a new source for future research. Thus, the similar studies have been considered to be done thoroughly on several alternative econometric models, but a lack of statistical information on a yearly basis and strong currency intervention constitute some barriers to transiting to a floating currency. The practical importance of the research is to prove that the dependency of the oil prices on the world GDP and world industry production, daily oil production and world oil consumption have decreased gradually. In the second part of the research, the dependency of the Azerbaijan and Kazakhstan economies on oil was proved. This might be a signal to transfer oil resources into human capital.

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.

The article considers the balance of hydrocarbon resources controlled by Azerbaijan, which gained independence in the 1990s, the extent of their utilization, and the potential that can be harnessed within our country’s existing capabilities, given the need to develop a qualitatively new oil strategy. In particular, in order to attract available resources into economic circulation, Azerbaijan signed the “Deal of the Century” with the world’s leading foreign oil companies due to a lack of sufficient financial, scientific−technical, technical−technological, investment−innovation potential for extracting and transporting oil from the deep seabed. Further, it assesses and rates in light of global experience and country reality concerning the effective use of oil money, and the structure of revenues and expenditures of the State Oil Fund of Azerbaijan (SOFAZ) for 2001−2021 is examined using particular materials, taking into consideration the multiplier impact. The analysis is used to examine the role of transfers to the state budget in ensuring macroeconomic stability, strengthening financial provisions for economic growth, improving the national economy’s structure, and regional development, and concludes that the oil strategy implemented in our country will ensure long−term, dynamic economic growth. Then, using quarterly data for 2003Q03-2021Q01, this article examines the impact of transfers from the State Oil Fund to the state budget on GDP, in other words, the long-term and short-term relationships between these variables. In this research, the ARDL model was used to assess co−integration and short−term relationships. In addition, this study used the FMOLS, DOLS, and CCR co−integration equations to explore long−term coefficients between variables. Granger causation tests were performed, Granger causation analysis was assessed using the Wald test (short−term or weak causation, long−term causation, and both short−term and long−term causation or strong causal relationship). The study put forward a hypothesis about the impact of transfers on GDP. This hypothesis was confirmed.

The paper examines the role of oil in the world economy and its impact on Azerbaijan economy. The reciprocal relations between factors in research were carried out by differential model of time series and times series have been checked whether they are unit root (Augmented Dickey-Fuller (ADF), Phillips-Perron (PP) and Kwiatkowski-Phillips-Schmidt-Shin (KPSS) as a methodology of the research. The research focused on the econometric analysis through traditional methods and statistics like EVIEWS 9, GRETL, PASW Statistics. The results confirm that the formation of demand and supply didn’t happen in the world market during 15-20 years. The relationships between oil prices and demand and supply prove the novelty of the research. The impact of oil price fluctuations on “economic concept” was high in 2007-2009 and 2014-2016. The practical importance of the article is the employment of the income ‒ generated from “the contract of the century” ‒ for the human development. Keywords: Economic Development, Oil Prices, Econometric Analysis, Functional Dependence, Macroeconomic Indicators JEL Classifications: E31, F31, Q41 DOI: https://doi.org/10.32479/ijeep.8001

Research examines the relations between GDP in Manat and Dollar and total electric energy consumption (1995-2017) for the last 22 years in the Republic of Azerbaijan. Besides, the relations between the electric energy consumption and the growth of GDP in these sectors were analysed. Autoregressive distributed lag model was used as a research methodology. Stationary tests of variables (ADF, PP, and KPSS) and Pairwise Granger Causality Tests were done. Stability of models was examined. Eviews_9 econometric software program was used to establish graphics and do calculations. Having analysed the research, there is a positive correlation not only in GDP and electric energy consumption but also electric energy consumption and GDP in different sectors of economy. We recommend to save electric energy. Keywords: Electric Energy Consumption, GDP Growth, Autoregressive Distributed Lag JEL Classifications: F15, B28, C23, Q43, O52 DOI: https://doi.org/10.32479/ijeep.8642