BCEAO Working Paper Series

The purpose of BCEAO Working Paper Series (BCEAO WPS) is to examine issues related to the economic concerns of the States or the Central Bank using relevant and innovative methodological approaches based on relevant literature review. The full version of the studies in French and the summeries are available at : https://cofeb.bceao.int/en/rapports-et-publications

The studies carried out in 2021 focused on the following themes:

  • (i) Banking liquidity and financing of the economy in WAEMU,
  • (ii) Analysis of the explanatory factors of tax effort and tax potential in WAEMU countries,
  • (iii) Interconnections and vulnerabilities within the WAEMU banking system: The lessons of the extended network model, and
  • (iv) Sustainability of the public debt of the WAEMU countries: How relevant is the current Community treshold ?

From the BCEAO, WPS are derived from the COFEB ABrégés. Their purpose is to disseminate and popularize the key messages and lessons of the publications. Each ABrégé provides a summary of the research findings in language that can be readily understood by the general public.

In addition, COFEB also produces Short Thematic Studies. Their purpose is to provide in-depth insight into a relevant and topical subject in a concise format. The following studies have been conducted : (i) Analysis of the financial cycle in WAEMU, (ii) Monetary policy and zero lower bound : lessons for BCEAO and (iii) Monetary policy and financial cycle in WAEMU : learning against the wind or cleaning afterward ?

The research program for 2022 focuses on the drafting of three (3) Studies and Research Papers (SRPs), one (1) Thematic Study Note (TSN), and two joint studies in the framework of cooperation with universities and research centers. The themes of the SRPs are as follows:

  • (I) Climate change: What is its impact on the Central Bank’s price stability objective and production in the WAEMU region?
  • (ii) Total factor productivity of SMEs and sustainability of long-term economic growth in WAEMU, and
  • (iii) Fiscal transition in the WAEMU region: Analysis of impact on the budget deficit.

The proposed theme for the TSN planned for 2022 is: “Monetary policy and the financial cycle in WAEMU: What strategy between 'Leaning against the wind' and 'Cleaning up afterwards' policies?”.

Finally, two (2) joint studies are planned in the framework of research cooperation: one in collaboration with the FERDI on the subject of “Competitiveness and structural transformation in WAEMU” and one with the ENSEA, focusing on “A comparative analysis of volatility of oil prices and economic growth in WAEMU”.

Modeling and Developing Economic Forecasting Tools

The aim is to provide the Central Bank with effective forecasting tools to anticipate changes in macroeconomic aggregates to better guide monetary policy and design monitoring and early warning indicators. In this context, a DSGE model was designed for WAEMU. In addition to this model, weekly forecasts are produced on autonomous liquidity factors for open market operations, as well as forecasts of macroeconomic variables using the Macroeconomic Forecast and Simulation and Integrated Microeconomic Forecasting Framework models to frame and assess the impact of various shocks on WAEMU economies. Other ad hoc models are also developed to meet the needs of the Central Bank Authorities and the Governments of the Union.