Geopolitical risks and recessions in a panel of advanced economies: evidence from over a century of data
journal contributionposted on 2019-03-15, 10:04 authored by Matthew W. Clance, Rangan Gupta, Mark Wohar
This paper uses a panel of 17 advanced countries over the annual period of 1899–2013, to analyze for the first time, the role played by geopolitical risks in predicting recessions. After controlling for other standard predictors based on a logit model, we find that while aggregate geopolitical risks do not have any predictive ability, geopolitical acts enhance the probability of future recessions, with geopolitical threats reducing the same.
- Business and Economics