Econometric analysis of trade relations between Azerbaijan, Ukraine and Georgia

Abstract

In this article, the integration processes between Azerbaijan, Ukraine and Georgia are considered through the indicators of integratedness of Azerbaijan’s GDP and the trade turnover of this country with the other two. All considered time series are non-stationary. So, there are problems of correct modeling of the corresponding time series, the components of which lead to a deviation from stationarity. The publication uses an econometric cointegration methodology for modeling the relationship between the non-stationary time series. A dynamic model of the long-term equilibrium is built, allowing to qualitatively forecast the state of foreign trade integration of the three countries under consideration and analyze the openness of the Azerbaijani economy in the regional aspect.