Resilience of developing countries to shocks: Case study of WAEMU countries with SUR and VAR Approaches

A D Adom

Economic Issues Journal Articles, 2016, vol. 21, issue 2, 105-138

Abstract: This article investigates the economic resilience of West African Economic and Monetary Union (WAEMU) member states to shocks. Towards that end, an in depth study is conducted with, first, seemingly unrelated regression (SUR) and structural vector auto-regression (SVAR) models. Second, two indexes - namely, a resistance index and a recovery index - capturing two major aspects of economic resilience in a given country, or group of countries, are constructed. Following a comprehensive analysis of results, five key elements stand out: (i) the WAEMU as a whole takes longer than the individual member countries to accommodate both domestic and external shocks; (ii) contrary to expectations, the impacts of changes in economic conditions from Europe are weak; (iii) the concept of 'engineering resilience' embodies more closely the type of resilience experienced in the WAEMU; (iv) with respect to resistance and recovery postshock, the 'best students' appear to be Senegal, C?te d'Ivoire and Niger in the former case, while Togo and C?te d'Ivoire emerge on top in the latter, and (v) member states exhibit more dissimilarities in terms of resistance than recovery. A five-point course of action, at both macro and microeconomic levels, aimed at enhancing the degree of economic resilience in individual countries, and the Union, as well as reducing resilience gaps among countries, seem appropriate. This course, if diligently pursued, will strengthen the effectiveness of monetary policy tools at the disposal of authorities as they deal with shocks, both internal and external.

Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.economicissues.org.uk/Files/2016/216Adom.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eis:articl:216adom

Access Statistics for this article

More articles in Economic Issues Journal Articles from Economic Issues Contact information at EDIRC.
Bibliographic data for series maintained by Dan Wheatley ().