Work

Geopolitical risk perceptions

Year: 2024

Type: article

Abstract: Geopolitical risk cannot be measured in a universal way. We develop new geopolitical risk indicators relying on local newspaper coverage to account for different perceptions. Using Russia as a case study, we demonstrate that geopolitical risk shocks identified from local news sources have significant adverse effects on the Russian economy, whereas geopolitical risk shocks identified from English-language news sources do not. We control for restricted press freedom by analyzing state-controlled and independent media separately. Employing a novel Russian sanctions index, we illustrate that geopolitical risk shocks propagate beyond the sanctions channel. Still, sanctions worsen the inflationary impact of geopolitical risk shocks substantially.

Source: Journal of International Economics

DOI: 10.1016/j.jinteco.2024.104005

Authors: Yevheniia Bondarenko, Vivien Lewis, Matthias Rottner, Yves Schüler

Institutions: Deutsche Bundesbank, Bank for International Settlements

Language: English

Topic: Market Dynamics and Volatility

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $3,760