The LIC-BRIC Linkage: Growth Spillovers

• Author: Issouf Samake - Yongzheng Yang - Catherine Pattillo
• Pages: 1-7

IMF

Volume 13, Number 3 September 2012

www.imf.org/researchbulletin

B U L L E T I N

1

The LIC-BRIC Linkage: Growth Spillovers

Issouf Samake,

Yongzheng Yang, and

Catherine Pattillo

Trade and financial ties

between low-income countries

(LICs) and emerging mar-

ket economies (EMEs) have expanded rapidly in recent years. This leads to the

potential for economic developments in EMEs to exert spillovers on LICs growth.

The most likely and important source countries of such spillovers are the so-called

BRICs—Brazil, Russia, India, and China. This article summarizes recent IMF

research on these spillovers.

Research on business cycle tr ansmission has regained attention in the wa ke of

the recent global na ncial crisis. e IMF has recently car ried out several stud-

ies that examine spi llovers from systemically importa nt countries (notably, the

United States, European Union, Japan, and Chi na) to the rest of the world (IMF,

2011a–2011e). Similar to earlier IMF work in th is eld, Bayoumi and Swiston

(2007), Helbling and others (2007), and Kose and others (2003) almost exclusively

focus on spillovers among advanced a nd major emerging market economies,

Surges in Capital Flows: Why History

Repeats Itself

Mahvash S. Qureshi

As the world economy limped out of the global financial cri-

sis, there was a resurgence of capital flows to emerging market

economies (EMEs)—followed by an even sharper reversal in the

aftermath of the U.S. sovereign downgrade. Recent months have

seen capital flows to EMEs resume again. This article summa-

rizes recent research on what causes these mercurial movements of capital flows to

emerging markets, and what factors determine how much capital countries receive

during surge episod es.

Aer collapsing duri ng the 2008 global nancia l crisis, capital ows to emerg-

ing market economies (EMEs) surged in late 2 009 and 2010, raising both macro-

economic challenges and na ncial-stability concerns. By the second ha lf of 2011,

however, capital ows receded rapidly, eliminating much of the cumu lated cur-

rency gains, and leavi ng EMEs grappling with shar ply depreciating currencies in

(continued on page 4)

In This Issue

1 Surges in Capital Flows:

Why History Repeats

Itself

1 The LIC-BRIC Linkage:

Growth Spillovers

6 Conversations with

Visiting Scholars

8 Q&A: Seven Questions on

Monetary Transmission

in Low-Income Countries

9 IMF Working Papers

14 Conferences, Seminars,

and Other Events

15 IMF Economic Review

Receives Its First

Impact Factor

15 IMF Fellowship Program:

Call for Applications

16 Staff Discussion

Notes

16 Visiting Scholars

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(continued on page 2)

Research Summaries