Analyzing price level in a booming economy: the case of Azerbaijan

The study analyzes price level in Azerbaijan economy over the period of 2000-2007 by employing a specific approach. The paper concludes that price increases caused by a resource boom differs from the price increases generated by a non-booming economy. Thereby, inflation mainly caused by resource boom has its own specific features in terms of impact on economy and therefore requires specific policy response. Some policy recommendations related to monetary and fiscal policies are suggested for elimination of harmful effects of resource boom and for preventing high price level in Azerbaijani economy.