Page 26 - Azerbaijan State University of Economics

CAUSALITY RELATIONS IN ECONOMIC PROCESSES: METHODOLOGY INTERPRETATION

economic development was reflected in number of economic

investigations. This list can be endlessly continued… Unclear point for
us is an effort to exalt misleading methodological approach to problem

of conditions.
“Causality- result relations are directed from upper levels of

economics to depth of finance system” [Svaleryd. 2002. Vol..57].

6) The replacement of causality and result, i.e. placement of
causality instead of result and visa versa is not simple mechanical

process and can take place only in condition of periodical change. For
example, in period of D. Hume and A. Smith the source of economic

development was considered capital savings. During the Great

depression the validity of this concept casted doubt. C. Clark wrote the
following: “… even in 1937 I casted a doubt about the validity of this

doctrine … Capital savings are necessary condition for economic
progress, however it is not sufficient condition” [Clark. 1984: 59]. Due

to this fact the model of capital savings plays the leading role most of
growth models (R. Harrod, R. Sollow, R. Lucas endogen growth and

technical progress models). Only after transfer of service sector to

dominant position in developed countries the post-modernism period
started its operation and as a result the treatment has changed at all.

The investigation of changed economic condition revealed that
long-lasting reliance on standard production function based on physical

capital savings is not valid anymore. The physical capital was replaced
by social capital. In economic growth calculation model of E. Denison

[Denison.1985: 28] and other similar models (R. Barrow) [Barro. 1991]

the basic production function and saving norm is widely used.
Institutionists like D. Nort and R. Thomas made further developments

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