Research On Financial Cooperation And Measurement Of BRICS Countries

The existing world structure and international governance rules are increasingly difficult to meet the needs of the economy.For developing countries,although they have made outstanding contributions to the global economy,they didn't enjoy the benefits and contributions from globalization.In developed countries,there has also been a phenomenon of reverse globalization.In an era of great changes in the world,countries should strengthen international cooperation,promote a more balanced model of development and create more fair and reasonable international rules.The BRICS financial cooperation reflects China's concept of mutual benefit,facing the changes and challenges of the world financial system.First of all,this paper uses the qualitative method to expound the theoretical and realistic basis,and discuss the achievements of financial cooperation among BRICS from three parts,then points out problems in the cooperation.Secondly,this paper uses the quantitative method to measure the financial relationship between BRICS from the perspective of exchange rate linkage.The data sample was divided by the time of 16^th June,2009 when the first BRICS summit was held,and the changes of the financial relationship among the five countries were observed through the changes of exchange rate linkage.The measurement of the financial relationship is carried out in two ways:DCC-MGARCH model is constructed to analyze the dynamic condition correlation coefficient and BEKK-MGARCH model is constructed to analyze the volatility spillover effect of the exchange rates of the BRICS countries.Based on above analysis,this paper draws the following conclusions:?1?The BRICS financial cooperation proves that it is correct to cope with the challenges of the international financial system with the concept of mutual benefit.?2?After the first BRICS Summit,the exchange rate linkage among BRICS countries become strong,proving that the financial relationship between the BRICS countries are closer and the level of financial cooperation is deepened.?3?After the first BRICS Summit,there are two-way volatility spillover effects between RMB and the other four currencies,which prove that RMB plays an important role in the BRICS currency cooperation.Finally,based on the problems of the financial cooperation and the conclusions of the empirical research,this paper puts forward some specific policy suggestions.