We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Geopolitical risks and financial stress in emerging economies.
- Authors
NguyenHuu, Tam; Örsal, Deniz Karaman
- Abstract
We investigate the impacts of geopolitical risks (GPRs) on financial stress (FS) in major emerging economies from 1985 to 2019. Applying a recently developed panel quantile estimation method, we show that GPRs pose serious risks to the stability of the financial condition in emerging economies. Namely, when FS is already equal to or above average, GPRs intensify this instability to a remarkable degree. Nevertheless, GPRs do not ignite the stress when the financial situation is benign. In emerging economies, foreign exchange markets and, to a lesser extent, the banking industry and the debt market suffer more severe consequences of geopolitical tensions than the stock market. In contrast, advanced economies, represented by the Group of Seven (G7), have witnessed detrimental consequences of GPRs on their stock markets, but negligible effects on other parts of their financial systems.
- Subjects
FINANCIAL stress; EMERGING markets; FINANCIAL risk; FOREIGN exchange market; GROUP of Seven countries; JOB stress
- Publication
World Economy, 2024, Vol 47, Issue 1, p217
- ISSN
0378-5920
- Publication type
Article
- DOI
10.1111/twec.13529