2024/09/25 by Yevheniia Bondarenko, Vivien Lewis, Matthias Rottner +2 · 2 citations
Economics, Econometrics and Finance · Energy · #Market Dynamics and Volatility #Economic Sanctions and International Relations #Global Energy Security and Policy
paper · doi:10.1016/j.jinteco.2024.104005
Geopolitical risk cannot be measured in a universal way. We develop new geopolitical risk indicators relying on local newspaper coverage to account for different perceptions. Using Russia as a case study, we demonstrate that geopolitical risk shocks identified from local news sources have significant adverse effects on the Russian economy, whereas geopolitical risk shocks identified from English-language news sources do not. We control for restricted press freedom by analyzing state-controlled and independent media separately. Employing a novel Russian sanctions index, we illustrate that geopolitical risk shocks propagate beyond the sanctions channel. Still, sanctions worsen the inflationary impact of geopolitical risk shocks substantially.