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

Correspondence: Mounoufie Valery KOFFI, valerykoffiuao@gmail.com

University of Alassane Ouattara, BP V18 Bouaké, Côte d'Ivoire.

pdf (496.52 Kb) | doi: https://doi.org/10.47260/bae/1229

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.

Keywords:

  Macroeconomic instability, current account balance, Panel VAR.

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