Abstract:

Purpose- It is ensured that the markets work in a fair, effective and transparent manner in order to protect the investors in money and capital markets. It is aimed to examine the financial contagion effect, which is of interest to investors trading in these markets, in Brazil, Indonesia, India, Turkey and South Africa, which are stated as having high current account deficit, high inflation rate, unstable growth and increasing external financing needs in the report prepared by Morgan Stanley in 2013. Methodology- The contagion effect of the financial markets of the developed countries to the financial markets of the developing countries was analyzed econometrically with the help of the MSCI (Morgan Stanley Capital International) index and the interest rates of the related countries with the help of the E-views (v.9) statistical package program. Findings- As a result of granger causality analysis in econometric models designed by including the financial crisis conditions, the presence of contagion effect in the financial markets of developed and developing countries, MSCI Indices of Fragile Five Countries (Brazil, Indonesia, India, South Africa and Turkey), USA Interest Rate Granger cause stands out. . According to this result, it shows the effect of developed countries on the financial markets of developing countries. Conclusion- The findings of the research contain important information in explaining the contagiousness of the crises in the financial markets. Using this information, it is expected to direct new research and enable investors to make the right decisions.

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