Model-Driven Macrofinancial Policy Analysis in the WAEMU: WAEMU

Selected Issues Papers, June 6, 2025

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Author: Knarik Ayvazyan
Date: June 6, 2025
Core purpose: A quantitative model for Macrofinancial Policy Analysis for the WAEMU developed to deepen the Fund’s engagement in macrofinancial surveillance in the region.
Key capabilities:
- Analyzes unobserved credit cycle dynamics and risks.
- Emphasizes macrofinancial linkages.
- Assesses the consistency between real and credit cycles.
- Builds alternative scenarios.
- Offers medium-term macroeconomic projections.
- Supports macrofinancial policy analysis.

Focus areas:
- Credit cycle analysis, including unobserved dynamics.
- Macrofinancial linkages between financial sector developments and real economy outcomes.
Analytical techniques mentioned:
- E. model simulation
- Forecasting and Simulations
- Impulse response
- Inflation expectation analysis

Uses include:
- Assessing consistency between real and credit cycles.
- Building alternative scenarios to evaluate macrofinancial risks.
- Informing macroprudential policy and monetary policy decisions.
- Supporting analysis related to capital adequacy requirements and countercyclical capital buffers.

Subject: Capital adequacy requirements, Countercyclical capital buffers, Credit, Financial regulation and supervision, Financial sector policy and analysis, Macrofinancial analysis, Macroprudential policy, Money
Keywords: Capital adequacy requirements, Capital Ratio, Countercyclical capital buffers, Credit, Credit Cycle, credit growth, credit provision, credit shock, E. model simulation, Forecasting and Simulations, impulse response, inflation expectation, Macrofinancial analysis, Macrofinancial Linkages, Macroprudential Policy, MODEL-DRIVEN MACROFINANCIAL Policy analysis, Monetary Policy, WAEMU, West Africa