Navigating post-Covid-19 economic recovery in WAEMU: A DSGE approach

This paper evaluates the effectiveness of economic policies implemented by fiscal and monetary authorities against the Covid-19 pandemic in the West African Economic and Monetary Union (WAEMU). To that end, we employ a medium-scale DSGE model that regards WAEMU as a closed system, made up of a conti...

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Bibliographic Details
Published in:Economic analysis and policy 2024-12, Vol.84, p.707-724
Main Authors: Mohamed, Abdoulaye Aboubacari, de Araujo, Jevuks Matheus, Cintado, Alejandro C. García
Format: Article
Language:English
Subjects:
Covid-19
DSGE model
Economic recovery
Fiscal policy
Monetary policy
WAEMU
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Summary:This paper evaluates the effectiveness of economic policies implemented by fiscal and monetary authorities against the Covid-19 pandemic in the West African Economic and Monetary Union (WAEMU). To that end, we employ a medium-scale DSGE model that regards WAEMU as a closed system, made up of a continuum of small open economies. Our simulations reveal that, while an ample battery of fiscal and monetary measures was deployed to counter the challenges posed by Covid-19 and support economic recovery, fiscal policy interventions proved more effective in the short run. Fiscal measures mitigated the pandemic’s economic fallout across all households, providing immediate relief and promoting a swift rebound.
ISSN:0313-5926
DOI:10.1016/j.eap.2024.08.031