Mortgaging the Future? Contagious Financial Crises in the Recent Past and Their Implications for BRICS Economies Asim K. Karmakar and Sovik Mukherjee What we know about the global financial crisis is that we don’t know very much. — Paul Samuelson Abstract Financial crises in the recent past have been transmittable because of the strategic interdependence of the macroeconomic factors. The more is the interdependence among the countries via the exposure to common macroeconomic factors, the higher will be the effect of the contagion. In this present context of globalization, rise of BRICS economies in the global stage demands special atten- tion because BRICS epitomizes a tectonic shift of global economic power away from the developed countries towards the developing world. The formation of BRICS has been essential for achieving sustainable global economic growth. But the question is to what extent is BRICS vulnerable to these contagious shock waves. The present paper in this context analyzes the issue by building up an empirical model which essentially highlights the consequences of financial crises in the new millennium and their impact on BRICS. The spotlight then shifts to the theoretical foundations of the crises. Section 3 draws attention to the economic impacts of these financial crises on BRICS economies. In particular, we highlight the effects of the East Asian crisis during 1997–1998, 2007–2008 US sub-prime mortgage market crisis and the recent Eurozone crisis along with the associated implications. The econometric analysis performed in Sect. 4 marks off the significant factors account- able in this regard. Finally, this paper comes to a close by resolving the fusillade of questions that motivated this topic. A.K. Karmakar (*) • S. Mukherjee Department of Economics, Jadavpur University, 188, Raja S.C. Mallick Road, Kolkata 700032, West Bengal, India e-mail: iasimkkarmakar@gmail.com; sovik1992@gmail.com © Springer International Publishing AG 2017 U ¨ . Haciog ˘lu, H. Dinc ¸er (eds.), Global Financial Crisis and Its Ramifications on Capital Markets, Contributions to Economics, DOI 10.1007/978-3-319-47021-4_14 175