Abstract
<title>Abstract</title> <p> We investigated the response of inflation dynamics and monetary policy to global, US, and domestic uncertainty shocks in BRICS economies in a panel structural vector autoregression (PSVAR) model. The method takes into account differences in economic structures and shock elasticities among countries, enabling us to quantify the responses of the various economies to uncertainty in detail. The study focuses on BRICS countries, covering Brazil, India, China, South Africa, and Saudi Arabia, wherein asymmetric impacts are apparent among these countries. We find that uncertainty shocks are associated with both large and persistent effects on inflation and short-term policy rates. Although China appears to be somewhat more resilient, the other countries – Brazil, India, South Africa, and Saudi Arabia – suffer even more pronounced negative impact. Policy rates are still relatively high in the majority of the sample; again, this highlights the importance of monetary policy actions to stabilize the economy, despite the headwinds. The research also highlights that the policy coordination should take into account cross-country differences, so as to effectively smooth the macroeconomic volatility. Limitations are primarily related to data access issues for some uncertainty proxies and for emerging countries. Yet, the study advances the literature by considering global, US, and domestic uncertainties in a single PSVAR framework, thus offering subtle insights into cross-country heterogeneity and policy trade-offs. These findings can be of interest to policymakers and financial authorities to develop focused stabilization policies and to increase the resilience of BRICS economies to external and domestic shocks. <bold>JEL classification:</bold> E31, E52, C32, F41, F44 </p>