Category: Geopolitics
Geopolitics, Geoeconomics, and Sovereign Risk
Geopolitical shocks directly raise sovereign default risk, while geoeconomic shocks work mainly through financial conditions and uncertainty. Complementary evidence from EU reveals that both these shocks depress lower‑tail GDP growth and tighten lending, with highly indebted and highly open economies bearing the brunt of these risks.
Geopolitical Hybrid Threats and their Impact on the Macroeconomy
New research shows that hybrid threats (cyberattacks, sabotage, disinformation, and coercion) have surged since the mid-2010s and depress the macroeconomy by weakening aggregate demand, raising uncertainty, and tightening financial conditions. A complementary study maps the broader landscape of geoeconomic tools and conflict.
The Rising Fragmentation of Global Science
Recent research highlights how geopolitical tensions, security policies, and restrictive immigration are reshaping international scientific collaboration and mobility. New evidence shows declining U.S.–China research ties with significant effects on knowledge flows, career paths, and innovation worldwide.
Geopolitics Driving Innovation and Competitive Sabotage
Geopolitical risk drives firms to innovate and relocate production away from risky suppliers, fundamentally altering global supply chains. Yet deliberately degrading competitors’ productivity only benefits domestic economies when pursued comprehensively, not partially, exposing a paradox in modern industrial policy.
Ramifications of Major Geopolitical Shocks on Consumer Behavior
Two new papers reveal that large geopolitical shocks have disproportionately greater economic impacts due to non-linear uncertainty amplification, while consumer surveys confirm that longer expected conflicts directly cause households to reduce spending and anticipate stagflationary outcomes.
Trade, Technology, and Security
Two new papers reveal how modern trade, from macroeconomic links to the flow of dual-use technologies, is deeply intertwined with geopolitical conflict and national security policy. They provide quantitative frameworks for understanding how trade dependencies, decoupling, and critical goods regulations shape economic welfare, escalation risks, and the strategic calculus of global policymakers.
Geopolitics and Bank Solvency
Two new working papers assess the impact of geopolitics on European banks, namely their funding costs, and capital ratios and analyze the type of geopolitical shocks that can threaten financial stability.
Geopolitics and Cross-Border Bank Lending
New research shows that rising geopolitical tensions significantly reduce cross-border bank lending and amplify the impact of monetary policy but banks’ international structures shape how geopolitical shocks spill over into home credit markets.
Origins of Geopolitical Risk, Economic Impacts and Trade Dynamics
New research highlights how the geographic and political origins of geopolitical risks—whether through sanctions-driven trade diversion or region-specific tensions—fundamentally alter economic decision-making, from export strategies to currency choices.