Page 39 - Azerbaijan State University of Economics

Umudvar Q.Aliyev, Gunay U.Guliyeva: Explorıng Economıc Expansıon In Azerbaıjan’s Natıonal Economy

qualitative changes driven by technologies such as ICT and biotechnology (Archibugi,
2017). Endogenous growth theories, advanced by Lucas (1988) and Romer (1990),
further emphasize internal factors like human capital and knowledge creation, arguing
that investments in education and research generate externalities that sustain
expansion, moving beyond exogenous inputs. Acemoglu and Robinson (2019) add
that inclusive institutions are vital, enabling equitable participation and robust
governance to foster expansion, unlike extractive systems that hinder progress.
Contemporary scholarship reimagines economic expansion as a holistic concept
integrating social, environmental, and technological dimensions. Brynjolfsson and
McAfee (2014) underscore the transformative role of digital technologies—AI,
automation, and e-commerce—in reshaping economic systems and enabling new
market dynamics (Krugman, 1979). The WEF’s Davos 2025 Forum projects AI could
boost global growth by 0.8 percentage points, though uneven adoption risks widening
disparities (The Guardian, 2025). Sustainability is equally critical, with Stern (2006)
advocating for climate change mitigation and green technologies to enhance long-
term resilience, aligning with the "green economy" paradigm that sees ecological
sustainability as a driver of expansion (IEA, 2024; WEF, 2025). Sen’s capability
approach (as cited in the document) broadens this further, suggesting expansion
should prioritize human well-being—education, health, and freedoms—over GDP
alone. Yet, challenges persist. Kotz (2008, 2019) critiques neoliberal capitalism’s
reliance on rising profits, stagnant wages, and debt, noting unsustainable patterns
exposed by crises like 2008 and COVID-19, which highlight the need for structural
reforms and diversification (Abdelkawy, 2024). Piketty (as cited in the document)
warns that unchecked capital accumulation fuels inequality, threatening the social
foundation of expansion.
Policy responses are essential to address these issues. North (as cited in the document)
and Chygryn et al. (2018) emphasize strong institutions and fiscal decentralization,
while strategic investments in human capital, innovation, and green infrastructure are
recommended to balance economic, social, and environmental goals (Romer, 1990;
Stern, 2006). The Davos 2025 discussions call for collaboration among governments,
international organizations, and the private sector to tackle inequalities and enhance
resilience (WEF, 2025). Ultimately, economic expansion offers a comprehensive
framework for 21st-century progress, integrating innovation, sustainability, and
inclusivity. Theoretical insights from Schumpeter, Romer, and Acemoglu, alongside
modern analyses of digital transformation and green economics, reveal its dynamic
nature. Achieving sustainable, equitable expansion demands addressing neoliberal
contradictions, global shocks, and institutional weaknesses through forward-thinking
policies, with AI, green technologies, and inclusive governance shaping a resilient
future.

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