GOVERNMENT INTERVENTION IN THE ECONOMY AND CRISIS RESILIENCE
Fidan Ismailova, Post-graduate student, Academy of State Governance under the President of the Azerbaijan Republic (Baku, Azerbaijan)
The author relies on the results of the latest global crisis to discuss the methodology by which the correlation between the level of government intervention in the economy and its crises resilience is assessed. She proceeds from the modified variant of the Index of Leftness (Rightness) of Economy formulated by Prof. Nazim Muzaffarli and the Cumulative Loss Index. An analysis of this correlation calculated for 57 states revealed that in the countries with a higher degree of government intervention in the economy before the global crisis the defensive response to crisis was weaker and cumulative losses bigger, which made it clear that government intervention in the flow of capitals, price formation and licensing greatly undermines the economic entities’ “immunity” to crises.
Keywords: Index of Leftness (Rightness) of Economy, Cumulative Loss Index, crisis resilience of economy, global financial crisis, government intervention in the economy.