Zeynab Giyasova

Bank deposits are vital for the economy, serving as a primary source of funding for banks that facilitate lending, investment, consumption, and overall economic growth. This article aims to examine how oil price fluctuations and inflation, two critical macroeconomic variables, influence bank deposits in Azerbaijan, an energy-exporting country. The primary purpose is to reveal the extent to which these factors, particularly in the context of Azerbaijan’s role as an energy exporter, affect the stability and liquidity of the banking sector. Using the Autoregressive Distributed Lag (ARDL) model and Granger causality testing, the study analyzes the dynamic relationships among these variables. The findings demonstrate a significant long-term relationship and causal effects between oil prices, inflation, and bank deposits. Specifically, a one-unit increase in oil prices results in a 0.057-unit rise in bank deposits, underscoring the positive impact of oil price increases on banking sector liquidity. Conversely, a one-unit increase in inflation decreases bank deposits by 0.812 units in the long term, highlighting inflation’s detrimental effect on financial stability.

Analyzing the connection between military expenditure and economic growth is interesting due to its policy implications, particularly in geopolitically strategic regions. In the case of Azerbaijan, where defense spending accounts for a significant share of the national budget, this relationship is especially relevant. The present study explores the long-term equilibrium between military expenditure, expressed as a percentage of GDP, over a three-decade period marked by consistent economic growth and substantial defense investments. To investigate this relationship, the study applies the Johansen cointegration method to check for a stable long-term relationship. It employs the Granger causality test to determine the causal direction between the variables. The findings show cointegrating relationships, indicating a long-term equilibrium between military expenditure and economic growth. Furthermore, the Granger causality analysis indicates a bidirectional causal link, implying that changes in military expenditure influence GDP per capita growth and vice versa. Specifically, the results show that military expenditure Granger causes GDP per capita at a lag of 3 (p-value = 0.012). Similarly, GDP per capita Granger causes military expenditure at the same lag (p-value = 0.0001). The findings reveal the dual impact of military spending on economic development, providing insights for Azerbaijani policymakers to balance defense needs with economic growth.

The study examines the long-term relationships between human development, economic growth, and environmental conditions in South Korea from 1996 to 2021. Understanding these interactions is crucial for shaping policies that balance economic progress, social well-being, and environmental sustainability. The analysis employs cointegration techniques, including the Fully Modified Ordinary Least Squares (FMOLS) and Canonical Cointegration Regression (CCR) methods, to estimate long-run relationships among GDP per capita, the Human Development Index (HDI), and carbon dioxide emissions per capita. Empirical findings confirm a stable long-term equilibrium between GDP and HDI, as demonstrated by significant Engle-Granger and Phillips-Ouliaris test statistics (p-values ≤ 0.0245). The results suggest that economic growth consistently enhances human development, while improvements in HDI contribute to sustained economic progress. The relationship between HDI and carbon emissions per capita, however, yields mixed evidence. The Engle-Granger test supports a long-term association (p-values ≤ 0.015), but the Phillips-Ouliaris test does not confirm cointegration (p-values ≥ 0.112). The covariance matrix test indicates that the negative relationship between HDI and carbon emissions per capita is stronger and more variable compared to the more stable inverse association between HDI and GDP per capita. Additionally, Granger causality analysis reveals a significant causal relationship between HDI and GDP per capita, supported by a Chi-square value of 20.627 and a p-value below 0.001. These findings highlight the complexity of integrating environmental considerations into development policies. South Korea’s experience underscores the necessity of a balanced policy framework that ensures sustainable economic growth while advancing human development and mitigating environmental impacts.