On the Exposure of the BRIC Countries to Global Economic Shocks

Ansgar Belke, Christian Dreger and Irina Dubova ()
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Irina Dubova: Ruhr Graduate School in Economics

No 10634, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The financial crisis led to a deep recession in many industrial countries. While large emerging countries recovered relatively quickly from the financial crisis, their performance deteriorated in the recent years, despite the modest recovery in advanced economies. The higher divergence of business cycles is closely linked to the Chinese transformation. During the crisis, the Chinese fiscal stimulus prevented a decline in GDP growth not only in that country, but also in resource-rich economies. The Chinese shift to consumption-driven growth led to a decline in commodity demand, and the environment became more challenging for many emerging markets. This view is supported by Bayesian VARs specified for the BRIC (Brazil, Russia, India, and China) countries. The results reveal a strong impact of international variables on GDP growth. In contrast to the other countries, China plays a crucial role in determining global trade and oil prices. Hence, the change in the Chinese growth strategy puts additional reform pressure on countries with abundant natural resources.

Keywords: Chinese transformation; business cycle divergence; Bayesian VARs (search for similar items in EconPapers)
JEL-codes: C32 E32 F44 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2017-03
New Economics Papers: this item is included in nep-cis, nep-fdg and nep-mac
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Published - published in: World Economy, 2019, 45 (1), 122-142

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Related works:
Journal Article: On the exposure of the BRIC countries to global economic shocks (2019)
Working Paper: On the exposure of the BRIC countries to global economic shocks (2017)
Working Paper: On the exposure of the BRIC countries to global economic shocks (2017)
Working Paper: On the Exposure of the BRIC Countries to Global Economic Shocks (2016)
Working Paper: On the exposure of the BRIC countries to global economic shocks (2016)
Working Paper: On the exposure of the BRIC countries to global economic shocks (2016)
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