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Relationship Between Macroeconomic instability and current account in WAEMU countries

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  • Mounoufie Valery KOFFI
  • Moro Jean-Pierre EBY
  • Dago Okoubi Arthur YAO

Abstract

In this study, we analyze the link between macroeconomic instability and the current account balance within the WAEMU zone. We use World Bank data from 1990 to 2022 and apply an econometric approach based on VAR modeling. The results indicate that the current account balance reacts negatively to macroeconomic instability shocks, but positively to supply shocks (GDP growth rate). The causality test reveals a bidirectional relationship between macroeconomic instability and the current account balance. These results highlight the need for macroeconomic stabilization policies and institutional reforms to strengthen economic resilience in the WAEMU zone. Policymakers should prioritize strategies that simultaneously promote stability and growth, thereby improving the domestic economy and external position of member countries.

Suggested Citation

  • Mounoufie Valery KOFFI & Moro Jean-Pierre EBY & Dago Okoubi Arthur YAO, 2025. "Relationship Between Macroeconomic instability and current account in WAEMU countries," Bulletin of Applied Economics, Risk Market Journals, vol. 12(2), pages 165-174.
    • Handle: RePEc:rmk:rmkbae:v:12:y:2025:i:2:p:165-174
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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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