Azerbaijan’s dynamic input-output model with inverse recursion

In this article Azerbaijan’s dynamic "input-output" model with the methodological basis of the inverse models of recursion was developed. The interbranch relations in Azerbaijan economy have been studied by means of a developed model, including mutually related oil and non-oil sectors. Dynamic model with inverse recursion refers to the type of dynamic "input-output" models. In this model, endogenous (found) parameters are total output and investments sectors. More precisely, the forecasted output volume for the final year of the sectors’ and the total volume of capital investments for the entire period in each and every sector are found. The yearly distribution of capital investment is realized via an exogenously given parameter. The calculation in this model is implemented in two stages. In the first stage, the total output volume of the sectors for the final year and the total volume of capital investments in each sector for the entire forescasted period are determined. In the second stage, the volume indicator of the gross output for each year of the forecasting period is calculated. The realization of the model has been implemented based on Azerbaijan’s National Accounts and statistical input-output tables, as well as other relevant data.