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Two inflation regimes detected in WAEMU

Economics, Econometrics and Finance research
Photo by Paul-Christian M on Unsplash · Unsplash License
Research area:Economics, Econometrics and FinanceGeneral Economics, Econometrics and FinanceEconomic indicator

What the study found

The study found two inflation regimes in the WAEMU: a high regime and a low regime. It also found that the exogenous determinants of these regimes, including the output gap, imported inflation, and oil prices, are outside the control means of the BCEAO (the Central Bank of West African States) money supply.

Why the authors say this matters

The authors suggest these findings open a debate about which institutions should be responsible for price stability in the WAEMU. They also indicate that the study provides additional qualitative information beyond traditional quantitative inflation forecasting tools.

What the researchers tested

The researchers used Markov-switching vector autoregressive (MSVAR) models, a time-series method that allows inflation behavior to change across different regimes, to develop indicators of cyclical turning points in inflation in the WAEMU region. The study focused on inflation patterns and their determinants in the West African Economic and Monetary Union.

What worked and what didn't

The model identified two inflation regimes, which the authors present as a successful result. The study also found that output gap, imported inflation, and oil prices are not controlled by the BCEAO's money supply, which means the central bank alone may not account for these drivers.

What to keep in mind

The abstract does not describe detailed limitations, sample size, or model performance measures. The summary is limited to the information provided in the title and abstract.

Key points

  • Two inflation regimes were identified in the WAEMU: high and low.
  • The study used Markov-switching vector autoregressive (MSVAR) models.
  • Output gap, imported inflation, and oil prices were identified as exogenous determinants of the inflation regimes.
  • These determinants are outside the control means of the BCEAO money supply.
  • The authors say the findings open debate about responsibility for price stability in the WAEMU.

Disclosure

Research title:
Two inflation regimes detected in WAEMU
Authors:
Pr. Allé Nar Diop Diop, Dr. Mbaye AW
Publication date:
2026-01-22
DOI:
10.15640/jeds.v13p11
OpenAlex record:
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Image credit:
Photo by Paul-Christian M on Unsplash · Unsplash License
AI provenance: This post was generated by OpenAI. The original authors did not write or review this post.

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