## A Quarterly Projection Model for the WAEMU

_IMF Working Papers, October 28, 2022_

## Source details

**Canonical URL:** [A Quarterly Projection Model for the WAEMU](https://www.imf.org/en/publications/wp/issues/2022/10/29/a-quarterly-projection-model-for-the-waemu-525213)

## Other formats

- [Markdown version](/en/publications/wp/issues/2022/10/29/a-quarterly-projection-model-for-the-waemu-525213/index.md)
- [Structured JSON version](/en/publications/wp/issues/2022/10/29/a-quarterly-projection-model-for-the-waemu-525213/index.json)
- [Bundle manifest](/en/publications/wp/issues/2022/10/29/a-quarterly-projection-model-for-the-waemu-525213/bundle-manifest.json)

## Bibliographic details
- Authors: Carlos de Resende, Alsim Fall, Demba Sy
- Published: October 28, 2022
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400225864.001

---

### Model structure and key features
- Semi-structural New-Keynesian Quarterly Projection Model (QPM) adapted for the WAEMU zone.
- Adjustments to the canonical QPM to capture:
  - The fixed exchange rate regime.
  - Relatively tight capital controls.
  - The ability of the central bank (Banque Centrale des États de l’Afrique de l’Ouest, BCEAO) to exert some influence on domestic money markets and interest rates.
  - An implicit foreign exchange reserve target within the BCEAO monetary policy framework.

### Parametrization and estimation
- The model is parametrized through a mix of calibration and Bayesian estimation techniques.

### Dynamic properties and validation
- The model displays dynamic properties for the main variables in response to various shocks that are in line with theoretical priors and empirical evidence.
- Moments computed from artificial data generated with the model match well those observed in the data.

### Forecasting and scenario analysis
- Medium-term forecasts that consider the Covid-19 pandemic produce sensible results when compared with forecasts produced by a standard VAR.

### Analytical uses and policy relevance
- The model displays desirable analytical properties and sensible data-matching and forecasting capabilities.
- Potential uses for the BCEAO include:
  - Identifying relevant shocks.
  - Mapping shock propagation into the WAEMU regional economy.
  - Better supporting monetary policy decisions through improved diagnosis and projection.

*Source: IMF Working Paper "A Quarterly Projection Model for the WAEMU" (authors: Carlos de Resende, Alsim Fall, Demba Sy; October 28, 2022).*

---

## Content in this bundle

- **Working Paper**
  - [Working Paper (Markdown version)](/-/media/files/publications/wp/2022/english/wpiea2022215-print-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [Working Paper (PDF)](/-/media/files/publications/wp/2022/english/wpiea2022215-print-pdf.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2022/10/29/a-quarterly-projection-model-for-the-waemu-525213_