| dc.description.abstract | The main purpose of this research is to estimate international trade flows for all the
existent bilateral relations between the BRICs – Brazil, Russia, India and China – in the
future time. This process starts by considering the estimations made by the investment bank Goldman Sachs (2001), which released a study that not only estimated amounts for the GDP and GDP per capita for the BRICs until the year 2050, but also revealed that these countries will position themselves, no exception, between the six biggest economies of the world by around the year 2040. This study adopts a gravity model
based on a sample of 57 countries. Trade flows and a variety of other data were
collected from 2000 to 2007 to enable the estimation of gravity equations that explain
the international trade in the world in current days. By using two different estimation methods – OLS and Tobit – a wide set of possible parameters was generated, which
were all tested on a technical and on a qualitative basis, with the aim to choose the two
most adequate equations for the estimations wanted. Finally, these two best parameter
sets were arranged and applied on gravity equations, combined with the Goldman Sachs predictions, in order to obtain future estimations of bilateral trade flows between
them in three time-scenarios: short term (2010), midterm (2020) and long term (2030).
In this way, the gravity model is here a pure forecasting model, validating this bound of
utilization for the instrument. The results are showing that the ‘intra-BRICs’ trade flows
will grow even more intense than the GDP of these countries itself, meaning an unprecedented internationalization process featured by the construction of a web of
high interdependence between these economies. Trade between the BRICs could rise
10 times within 2010 and 2020, and 50 times within 2010 and 2050. International trade
among the BRICs will definitely be necessary for them to sustain economic growth. | en |
