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

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  • Mohamed, Abdoulaye Aboubacari
  • de Araujo, Jevuks Matheus
  • Cintado, Alejandro C. García

Abstract

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.

Suggested Citation

  • Mohamed, Abdoulaye Aboubacari & de Araujo, Jevuks Matheus & Cintado, Alejandro C. García, 2024. "Navigating post-Covid-19 economic recovery in WAEMU: A DSGE approach," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 707-724.
    • Handle: RePEc:eee:ecanpo:v:84:y:2024:i:c:p:707-724
    DOI: 10.1016/j.eap.2024.08.031
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    More about this item

    Keywords

    Fiscal policy; Monetary policy; Covid-19; Economic recovery; DSGE model; WAEMU;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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