The impact of economic growth and fiscal policy on poverty rate in Uzbekistan: application of neutrosophic theory and time series approaches

Aziza Usmanova

Tashkent State University of Economics, Uzbekistan

Email: a.usmanova@tsue.uz

Abstract

The aim of this paper is to analyze how economic growth and fiscal policy impact on poverty rate in Uzbekistan. To reach this aim neutrosophic-AHP method was applied together with two time series models, namely Autoregressive Distributed Lags (ARDL) and Vector Autoregression (VAR) models. The statistical data of Uzbekistan over the period of 2000-2021 was used. Neutrosophic-AHP served as a basis for time series analysis. In accordance with AIC and BIC criteria, VAR was chosen as the most adequate model. Results of VAR model showed that a poverty rate has a delay effect on two years, when the increase of the second lag of poverty difference by one unit also increased current poverty difference by 0.501 units. Also, it was revealed that economic growth affects poverty adversely with delay in one lag, whereas taxes – with two lags. Interesting situation occurred with government expenditures, which impacted negatively on poverty after a one-year lag, but positively after two lags.

Keywords: poverty; economic growth; fiscal policy; neutrosophy, ARDL; VAR