Geopolitical risk shocks and the Brazilian economy

Conditional effects of local and global risk factors on the co-movements between economic growth and inflation: Insights into G8 economies

“…Additionally, we used external shock factors such as Global economic policy uncertainty (GEPU) and Geopolitical risk (GPR) to divulge their conditionality on the nexus in the macroeconomic fundamentals of the G8 economies. The choice of the variables was motivated from several sources, for instance, GDP and CPI [ 7 , [9] , [10] , [11] , [12] , [13] , 36 ], GPR [ 14 , [25] , [26] , [27] , [28] , 31 , 32 ], and EPU [ 18 , 22 , 24 , 34 ]. In line with several economic events world economies have witnessed so far, we allowed a sample period from January 1997 to August 2021 restricted by consistent data available for the selected variables.…”

“…Barros Jr, Gomes, and Soave [ 32 ] looked into the effects of global geopolitical risk shocks on the Brazilian economy using quarterly data from Brazil as well as indices that take into account GPR connected to the US, Russia, and a worldwide GPR index. In terms of their findings of a Bayesian vector autoregressive model, real economic activity reacts more strongly to Russian risk than to global or US risk, despite the fact that prices and financial indicators seem to be more responsive to global risk.…”

Green Bonds, Conventional Bonds and Geopolitical Risk

“…The GPR is produced using news from ten major national and international newspapers based on a search for words from eight word categories, namely War Threats, Peace Threats, Military Buildups, Nuclear Threats, Terror Threats, Beginning of War, Escalation of War, Terror Acts. Barros et al (2022) uses the international GPR to analyze the effects of shocks on the Brazilian economy. Gozgor et al (2019) utilize the GPR, along with other uncertainty measures, to analyze their role on return and volatility of gold, finding that the GPR and the U.S. real effective exchange rate significantly affect gold returns.…”