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The paper examines the impact of political risk on stock and foreign exchange markets in a comprehensive sample of sixty-six countries and twenty political risk indicators mostly covering the financial crisis and recovery periods from May 2001 to April 2014. The impact is assessed on return, volatility and jumps series of monthly frequency. Evidence reveals that Europe is mostly at higher risks generated from economic crisis; whereas, political risks explain the high volatility and discontinuity in international stock and foreign exchange markets in other regions.

The article examines the corruption–growth relationship in a non-linear framework using panel fixed effects (FE) and system generalized methods of moments (SGMM) model for over 110 countries for the period 1984–2009. The results reveal that the least corrupt countries enjoy higher growth rates, whereas highly corrupt countries experience low growth. Furthermore, corruption has a positive and significant effect on economic growth up to a certain level and thereafter it reduces growth. The results are robust under various methodology and an alternative measure of corruption. JEL Classification: D73, O47, O50

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