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

  • Mustafa Yavuz Cakir
  • Alain Kabundi

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 transmission 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 euroarea 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.

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Paper provided by Economic Research Southern Africa in its series Working Papers with number 250.

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Length: 37 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:rza:wpaper:250
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