PUBLISHED PAPERS #03.04
| Ramiz Rahmanov. Changes in the Volatility of the Business Cycles and the Role of Fiscal Policy: Evidence from Azerbaijan |
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| Abstract. This paper examines the evolution of Azerbaijan’s GDP volatility, focusing on the role of fiscal policy shocks in the non-oil sector. While the mid-2000s oil boom caused high volatility in oil-gas GDP, stabilization in hydrocarbon production reduced total GDP fluctuations in the following decade. However, fiscal expansion led to increased non-oil GDP volatility in the 2010s. By the 2020s, improved fiscal management stabilized budget spending shocks. Variance decomposition analysis highlights fiscal policy as a key driver of non-oil GDP volatility. The findings underscore the growing resilience of Azerbaijan’s economy through diversification and enhanced policy frameworks. |
| Keywords: business cycle volatility, fiscal policy shocks, Azerbaijan economy, structural VAR model, non-oil-gas GDP |
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| DOI: https://doi.org/10.30546/MaCoSEP2025.1096 |