| By: |
Yongzheng Yang;
Issouf Samaké |
| Abstract: |
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. |
| Keywords: |
Brazil , Business cycles , China , Economic growth , Economic models , India , Low-income developing countries , Russian Federation , Spillovers , |
| Date: |
2011–11–16 |
| URL: |
http://d.repec.org/n?u=RePEc:imf:imfwpa:11/267&r=cis |