Dynamic Spillover Effects of Member Economies on Foreign Financial Flows and Macroeconomic Indicators within the BRICS Bloc

Résumé

The interdependence of emerging economies within the BRICS grouping-Brazil, Russia, India, China, and South Africa-has been analysed through a time-varying parameter vector autoregression (TVP-VAR) framework to quantify member-related spillovers affecting foreign financial flows and macroeconomic fundamentals.Using quarterly data spanning 1998 to 2023, obtained from the International Monetary Fund, World Bank, and Bloomberg Terminal, the analysis has focused on the dynamic interactions between foreign direct investment (FDI) and key domestic indicators, including inflation rates, real gross domestic product growth (RGDP), and central bank policy interest rates (IR).It has been observed that spillover effects are both timedependent and asymmetric across member states.China and South Africa have consistently functioned as net transmitters of macro-financial shocks, whereas Brazil and Russia have primarily acted as net recipients.FDI flows have been found to be particularly sensitive to inflationary pressures and monetary policy adjustments within the bloc, with heightened responsiveness during periods of global economic volatility.The findings suggest that the internal propagation of macroeconomic disturbances within the BRICS network exerts a measurable influence on the direction and intensity of capital flows, thereby reinforcing the systemic importance of regional coordination.By identifying the nodes of shock origination and absorption, the study contributes to a more granular understanding of regional vulnerability and resilience.These insights hold significant implications for policymakers aiming to strengthen economic safeguards and for investors seeking to recalibrate risk exposure in emerging markets.Emphasis is placed on the need for synchronised macroeconomic policy frameworks to mitigate adverse contagion and enhance financial stability within the BRICS consortium.

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