A VECM Analysis of the Relations the CPI, PPI, GDP Per Capita, Exchange Rate in the Republic of ..

The study focuses on an empirical analysis of a macroeconomic indicators system, such as CPI, PPI, GDP per capita, and exchange rate, that represent the level and pace of a country's socio-economic growth, taking into account the effects of the COVID19 pandemic and oil prices on the Republic of Azerbaijan as an example. Analysis Structure: The study is divided into four parts. Introduction, Literature Review, Methodology, Results, Discussion, and Conclusion are all included. The thesis took place in the department of "Mathematical support of economic studies" of the Institute of Economics of the Azerbaijan National Academy of Sciences for four months in 2020.

Methodology: The long-run and short run effects of macro indicators system on each other were analysed using causality, impulse responses, and variance decomposition on monthly statistics covering the period 2015M01-2020M07 for the Republic of Azerbaijan in the dynamic VEC model, taking into account the COVID19 pandemic and oil prices. Results: Calculations based on the proven stable VEC (5) model revealed that the triad (CPI, PPI, Ex Rate) has a long-term causal relationship with all endogenous variables.

CPI and GDP Per Capita, as well as PPI and Ex Rate, have a short-term bi-directional causal relationship.

There is a unidirectional shortterm causal relationship from PPI and Ex Rate to GDP Per Capita; from Ex Rate to CPI. Conclusion: We can write the following long-term expressions to summarise the results:

the alteration a) The PPI and CPI variables have a negative impact on GDP per Cap, while Ex Rate has a positive impact; b) The CPI has a negative impact on GDP per Cap and PPI variables, while Ex Rate has a positive impact; c) The PPI has a negative impact on the Ex Rate and CPI variables, while GDP per Cap has a positive impact, so the negative impact of the CPI is greater; d It's also been discovered that the indicator PPI has a negative impact on GDP per Cap, CPI, and Ex Rate shifts.

Please see the link - https://www.journalajeba.com/index.php/AJEBA/article/view/30306