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Macroeconomic challenges of scaling up aid to West African Economic and Monetary Union

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  • Sessinou Erick Abel Dedehouanou
  • Abou Kane

Abstract

The increase in Official Development Assistance for which the international community has mobilised should enable developing countries such as those of the West African Economic and Monetary Union to have the resources to achieve sustainable development goals and, more recently, to deal with the Coronavirus crisis. But this ‘Big Push’ of aid presents several macroeconomic challenges that this paper simulates using a dynamic stochastic general equilibrium model. The results showed that an increase in aid to West African Economic and Monetary Union countries translates into an increase in output and labour input. On the other hand, increased aid leads to an appreciation of the real exchange rate and a widening of the budget deficit.

Suggested Citation

  • Sessinou Erick Abel Dedehouanou & Abou Kane, 2023. "Macroeconomic challenges of scaling up aid to West African Economic and Monetary Union," South African Journal of Economics, Economic Society of South Africa, vol. 91(3), pages 330-350, September.
    • Handle: RePEc:bla:sajeco:v:91:y:2023:i:3:p:330-350
    DOI: 10.1111/saje.12350
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