The us subprime crisis and stock market integration: evidence from the BRICS

The aim of this study is to examine the level of stock market co-movement in the BRICS countries and three major industrialized countries (Japan, UK and USA). While analyzing the interdependence and integration of markets, two subsets are examined: before (2000 – 2007) and during the global financial crisis (2007-2011). Generally, interdependence across markets is likely to increase during a highly volatile period. This is problematic because if it were true, the main benefit of international diversification would be reduced at times when it is most needed. The results reveal the dominant role of the US financial markets over the examined time period. Empirical studies of this research paper indicate that cross-market linkages have become slightly stronger during the ongoing subprime crisis than before crisis. However, results also show that an investor may obtain some international diversification benefits by investing especially in the BRICS countries despite the fact of unstable economic condition and growing globalization.

The BRICS: some historical experiences, growth challenges and opportunities

The acronym BRICS was a fad among the media and global investors. Now, the acronym sounds passé. However, the group of countries remains important, from both political and economic reasons. They have a large aggregate size, 28% of the global GDP and 42% of the world’s population, high growth potential due to the current significant misallocation of resources and relatively low stock of human capital, structural transformation is in progress and one of them, China, is taking steps to become a global power and a challenger to the US dominance. This paper provides a brief overview of the five economies, Brazil, Russia, India, China and South Africa. We focus on some aspects of their history, the Chinese initiatives in international finance and geopolitical strategic moves, their growth experience and structural transformation over the last 35 years, trade and investment integration into the global economy and among themselves, the growth challenges faced by their economies and the potential gains to the Brazilian economy from a stronger integration with the other BRICS. In association with its efforts to be a global power, China aims to become a major player in global finance and to achieve the status of global currency for the renminbi, which would be the first currency of an emerging economy to attain such position. Despite the similarities, the BRICS encompass very diverse economies. In the recent decades, China and India showed stellar growth rates. On the other hand, Brazil, Russia and South Africa have expanded just in line with global output growth with the Russian economy exhibiting high volatility. China is by far the largest economy, and South Africa the smallest, the only BRICS economy with a GDP lower than US$ 1 trillion. Russia abandoned communism almost 25 years ago, but reversed many of the privatizations of 90’s. China is still ruled by communism, but has a vibrant private sector and recently has officially declared market forces to play a dominant role in its economy. Brazil, Russia and South Africa are global natural resources powerhouses and commodity exporters while China and India are large commodity importers. Brazil is relatively closed to international trade of goods and services, in marked contrast to the other four economies. Brazil, India and South Africa are dependent on external capital flows whereas China and Russia are capital exporters. India and South Africa have younger populations and a large portion living below the poverty line. Despite its extraordinary growth experience that lifted many millions from poverty, China still has 28% of its population classified as poor. Russia and China have much older populations and one of their challenges is to deal with the effects of a declining labor force in the near future. India, China and South Africa face a long way to urbanization, while Brazil and Russia are already urbanized countries. China is an industrial economy but its primary sector still absorbs a large pool of workers. India is not, but the primary sector employs also a large share of the labor force. China’s aggregate demand structure is biased towards investment that has been driving its expansion. Brazil and South Africa have an aggregate demand structure similar to the developed economies, with private consumption accounting for approximately 70%. The same similarity applies to the supply side, as in both economies the share of services nears 70%. The development problem is a productivity problem, so microeconomic reforms are badly needed to foster long-term growth of the BRICS economies since they have lost steam due a variety of factors, but fundamentally due to slower total factor productivity growth. China and India are implementing ambitious reform programs, while Brazil is dealing with macroeconomic disequilibria. Russia and South Africa remain mute about structural reforms. There are some potential benefits to Brazil to be extracted from a greater economic integration with the BRICS, particularly in natural resources intensive industries and services. Necessary conditions to the materialization of those gains are the removal of the several sources of resource misallocation and strong investment in human capital.

Analysis of the economic and financial relations between Latin American and the Caribbean and the BRICS group

This document has been prepared in compliance with Activity III.1.2 of the Work Programme of SELA for the year 2015, entitled “Analysis of the economic and financial relations between Latin America and the Caribbean and the BRICS countries”. The document comprises an introduction, four chapters and a final section with the conclusions and recommendations stemming from the study. Chapter I describes the economic performance of the BRICS countries, their economic relations with Latin America and the Caribbean and the functioning of the development banks of the member countries. Chapter II assesses the financial architecture of Latin America and the Caribbean and explores the needs for financing in the region. Chapter III deals with the regulatory frameworks governing public and private investments in Latin America and the Caribbean and the Bilateral Investment Treaties with the BRICS countries. Finally, Chapter IV describes the main features of the New Development Bank (NDB) and the Contingent Reserve Agreement of the BRICS

Sustainable development in the BRICS countries: an efficiency analysis by data envelopment

There is much concern about the social and environmental impacts caused by the economic growth of nations. Thus, to evaluate the socio-economic performance of nations, economists have increasingly addressed matters related to social welfare and the environment. It is within the scope of this context that this work discusses the performance of countries in the BRICS group regarding sustainable development. The objective of this study regards evaluating the efficiency of these countries in transforming productive resources and technological innovation into sustainable development. The proposed objective was achieved by using econometric tools as well as the data envelopment analysis method to then create economic, environmental, and social efficiency rankings for the BRICS countries, which enabled to carry out comparative analyses on the sustainable development of those countries. The results of such assessments can be of interest for more specific scientific explorations.

L'Union européenne face aux BRICS dans la gouvernance mondiale: Une réponse efficace? = The European Union facing the BRICS countries in world governance: an effective response? Bruges Regional Integration & Global Governance Paper 2/2014

Le présent travail se concentre sur deux principaux acteurs du monde en évolution, l'Union européenne (UE) et l'ensemble des pays BRICS, et le défi que posent collectivement ces derniers à la première sur la base de leurs poids économique et politique accrus dans le cadre de la gouvernance mondiale. On fait valoir que la doctrine d’un « multilatéralisme efficace » décrivant la position de l’UE sur la gouvernance mondiale est de plus en plus remise en cause par les BRICS dont l’approche repose sur un autre principe : celui d’un « multilatéralisme relationnel ». Afin de pouvoir analyser comment l’UE réagit à la confiance et la cohérence croissante des BRICS dans les instances internationales, ce travail examine la réponse de l’UE dans trois domaines de la gouvernance mondiale que sont le commerce, le changement climatique et la sécurité internationale. Ceci permet d’évaluer dans quelle mesure les différentes institutions européennes mettent en œuvre ce que ce travail qualifie de « réponse efficace » à la montée en puissance des BRICS. Au terme de l’analyse, cette étude s’attache à souligner que la réaction des institutions de l’UE à l'influence grandissante des BRICS sur la scène internationale ne peut être considérée comme efficace que dans le domaine du changement climatique.

Commentary : comparison of historical medical spending patterns among the BRICS and G7

A commentary on "Comparison of historical medical spending patterns among the BRICS and G7" by Jakovljevic, M.M. (2015). J.Med.Econ. 19, 70–76, doi:10.3111/13696998.2015.1093493

5th BRICS Trade and Economic Research Network (TERN) meeting: the impact of mega agreements on BRICS

The BRICS TERN – BRICS Trade and Economics Research Network is a group of independent research institutes established four years ago by five think tanks from Brazil, Russia, India, China and South Africa. The main objective of the network is to study different aspects of trade and economic relations amongst these five countries. The purpose of the V BRICS TERN Meeting was to analyze and debate the effects of the negotiations of the Mega Agreements, mainly those initiated by the US and the EU, already in negotiation, to each of the BRICS Trade Policies. Both Mega Agreements were examined – the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). The studies included the main impacts on trade flows and on the international trade rules system, respecting the perspective of each of the countries concerned. This workshop was an initiative of the Center for Global Trade and Investments (CGTI), a think-tank on International Trade held by FGV Sao Paulo School of Economics. Its main objective is the research on trade regulation, preferential trade agreements, trade and currency, trade and global value chains, through legal analysis and economic modelling. One of its main researches, now, is on the potential economic and legal impacts of the Mega Agreements on Brazil and WTO rules. This meeting was organized in March14, 2014, in Rio de Janeiro, in a perfect timing for introducing such issues in the international agenda, in advance of the 6th BRICS Summit scheduled to be held in Brazil in July 2014.

Las dinámicas de cooperación sur-sur de los BRICS: una oportunidad para construir una identidad de bloque (2009-2014)

La presente monografía pretende explorar la cooperación Sur-Sur en el marco de los BRICS como una estrategia de soft power de estos Estados para aumentar su liderazgo global. Lo anterior se constituye como un elemento fundamental en la consolidación de los BRICS como un foro político y ha permitido el inicio de un proceso de cohesión identitaria dentro del grupo, lo que a su vez ha generado que actúen conjuntamente en diferentes espacios. El análisis se hace a través de la aproximación teórica de la hegemonía cooperativa de Thomas Pedersen y el concepto de soft power desarrollado por Joseph Nye, lo que permite no solo caracterizar a los miembros del grupo BRICS sino que también da lugar a identificar sus aspiraciones en el foro y en torno a qué temas u objetivos se unen.

Em quais setores investir nos BRICs?: uma análise sob o prisma da organização industrial

Este trabalho analisou 2770 empresas nos BRICs entre 1995 e 2008 para identificar quais os setores mais atrativos para investimento conforme a relação risco-retorno, geração de valor e a tradição da Organização Industrial (IO). Os resultados reforçam os de Fama e French (1992), Mohanram (2005) e Goldszmidt, Brito e Vasconcelos (2007), porém divergem de World Bank (2008) quanto à China. Constatou-se que os setores mais atrativos na perspectiva de risco-retorno sobre o patrimônio líquido seriam óleo & gás na Rússia e mineração no Brasil, Índia e China, enquanto aqueles com menor atratividade seriam os setores têxtil, motores, máquinas & ferramentas e telecomunicações no Brasil.

Structural challenges in a multipolar and multicultural global legal era : BRICS’ global legal politics beyond cultural and economic partnerships

New emerging international dynamics introduce a global poly-axiological polycentric disorder which undermines the tradition of a unique global legal order in international law. Modern Era was characterized by Western European civilizational model – from which human rights is a byproduct. This consensus had its legitimacy tested by XXst century’s scenario – and the ‘BRICS factor/actor’ is a symptom of this reality. Its empowerment in world politics lead to the rise of distinct groups of States/civilizations provided with different legal, political, economic and social traditions – promoting an unexpected uprise of otherness in international legal order and inviting it to a complete and unforeseeable reframing process. Beyond Washington or Brussels Consensus, other custom-originated discourses (Brasília, Moscow, New Delhi, Peking or Cape Town Consensus, among other unfolded possibilities) will probably henceforth attempt shaping international law in present global legal disorder.

Brazil and India: two BRICs as a building bloc for South-South cooperation""

Includes Bibliography

Os BRICS na perspectiva geopolítica: uma análise cientométrica de 2001 a 2010

Pós-graduação em Ciência da Informação - FFC

Continental regionalism: Brazil's prominent role in the Americas. CEPS Working Document No. 374, February 2013

Brazil has a dual identity as a Latin American country and one of the BRICS (Brazil, Russia, India, China and South Africa). The regional and global dimensions of Brasilia’s foreign policy have been closely intertwined. Inspired by the idea of development and autonomy in the last ten years, Brazil has assumed a stronger regional leadership role. The result has been the emergence of a South American space, with Mercosur and Unasur as the main integration schemes. For Brazil, regionalism is not only a goal in itself but also an instrument for exerting global influence and for ‘soft-balancing’ the United States. Washington’s lower profile in the region has facilitated Brazil’s rise as a regional and even continental player, with a strong influence on the Latin American puzzle composed of many different pieces or concentric circles.