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

Author(s)
Mustafa Yavuz Çakir and Alain Kabundi
Publication date
October 2011
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.
Publication PDF
Series title
Working Paper 250
Journal
Economic Modelling, 32 (2013) 190 - 202
JEL classifications