Geopolitical Tensions May Rise The Geopolitical Risk Index measures adverse geopolitical events based on a tally of newspaper articles covering geopolitical tensions and examines its evolution and economic effects since 1900.
The Russian invasion of Ukraine in early 2022 caused the major panic of a global war, and global equities sold off.
Recently, the US and Germany’s increased support for Ukraine risks raising tensions to the levels of early 2022. If the war intensifies, global equities could suffer another selloff, and conversely, an unforeseen resolution would be positive.
Source: Helios Quantitative Research, Caldara, Dario and Matteo Iacoviello (2022), “Measuring Geopolitical Risk,” American Economic Review, April, 112(4), pp.1194-1225