Low-Income Countries' BRIC Linkage: Are There Growth Spillovers?

 
Author/Editor: Samaké, Issouf ; Yang, Yongzheng
 
Publication Date: November 01, 2011
 
Electronic Access: Free Full text (PDF file size is 1,296KB).
Use the free Adobe Acrobat Reader to view this PDF file

 
Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: Trade and financial ties between low-income countries (LICs) and Brazil, Russia, India, and China (BRICs) have expanded rapidly in recent years. This gives rise to the potential for growth to spill over from the latter to the former. We employ a global vector autoregression (GVAR) model to investigate the extent of business cycle transmission from BRICs to LICs through both direct (FDI, trade, productivity, exchange rates) and indirect (global commodity prices, demand, and interest rates) channels. The estimation results show that there are significant direct spillovers while indirect spillovers also matters in many cases. Based on these results, we show that growing LIC-BRIC ties have significantly helped alleviate the adverse impact of the recent global financial crisis on LIC economies.
 
Series: Working Paper No. 11/267
Subject(s): Brazil | Business cycles | China | Economic growth | Economic models | India | Low-income developing countries | Russian Federation | Spillovers

Author's Keyword(s): Spillovers | low-income countries | BRICs | Global VAR | Structural VAR
 
English
Publication Date: November 01, 2011
Format: Paper
Stock No: WPIEA2011267 Pages: 35
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
Please address any questions about this title to publications@imf.org