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Commodity prices, inflationary pressures, and monetary policy: evidence from BRICS economies

Mallick, Sushanta K. and Sousa, Ricardo M. (2013) Commodity prices, inflationary pressures, and monetary policy: evidence from BRICS economies. Open Economies Review, 24 (4). pp. 677-694. ISSN 0923-7992

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Identification Number: 10.1007/s11079-012-9261-5


We assess the transmission of monetary policy and the impact of fluctuations in commodity prices on the real economy for the five biggest and fastest growing emerging market economies: Brazil, Russia, India, China and South Africa (BRICS). Using modern econometric techniques, we show that a monetary policy contraction has a negative effect on output, suggesting that it can lean against unexpected macroeconomic shocks even when the financial markets are not well-developed in this group of countries. We also uncover the importance of commodity price shocks, which lead to a rise in inflation and demand an aggressive behaviour from central banks towards inflation stabilisation.

Item Type: Article
Official URL:
Additional Information: © 2012 Springer Science+Business Media
Divisions: Economics
Financial Markets Group
Subjects: H Social Sciences > HB Economic Theory
JEL classification: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E37 - Forecasting and Simulation
E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy (Targets, Instruments, and Effects)
Date Deposited: 19 Aug 2013 11:55
Last Modified: 04 Apr 2024 19:21

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