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Trade Shocks from BRIC to South Africa: A Global VAR Analysis

25 September 2012
Publication Type: Working Paper
JEL Code: C32, C51, F14

This paper studies the trade linkages between South Africa and the BRIC (Brazil, Russia, India, and China) countries. We apply a global vector autoregressive model (global VAR) to investigate the degree of trade linkages and shock trans- mission between South Africa and the BRIC countries over the period 1995Q1-2009Q4. The model contains 32 countries and has two different estimations: the first one consists of 24 countries and one region, with the 8 countries in the euro area treated as a single economy; and the second estimation contains 20 countries and two regions, with the BRIC and the euro area countries respectively treated as a single economy. The results suggest that trade linkages exist between our focus economies; however the magnitude differs between countries. Shocks from each BRIC country are shown to have considerable impact on South African real imports and output.

Series title: Working Paper 250
1 October 2011
Journal: Economic Modelling, 32 (2013) 190 - 202
1 May 2013
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