Abstract
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 IndicatorsJEL Classifications: E31, F31, Q41DOI: https://doi.org/10.32479/ijeep.8001
Highlights
World Oil market is still in the centre of attentions in the modern world (Bataa et al, 2016; Liu et al, 2015)
It is recommended to reduce the effects of these shocks through exchange policy Oil prices influence to the production prices of oil twice more than retail ones Oil prices directly influence on exchange rates
Oil prices impact little on economic development
Summary
World Oil market is still in the centre of attentions in the modern world (Bataa et al, 2016; Liu et al, 2015). It is the energy driven factor of world economics, stock market, oil exporting and importing countries’ economics, exchange rate and etc. Modern oil market is featured in developing dynamics and it is related to the increase of consumption and world production. During 2005-2015, oil consumption and production increased 12.1% and 11.9% respectively. There is unstability in the world oil market. This case was observed seriously in 2008 and 2014-2016
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