A connectedness analysis among BRICS’s geopolitical risks and the US macroeconomy

Zhang, Yulian; Hamori, Shigeyuki

doi:10.1016/j.eap.2022.08.004

Cited by 18 publications

(9 citation statements)

References 66 publications

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“…The US economy is found to be influential toward geopolitical risk and coordination between economic policy and geopolitical matters is required for avoiding the detrimental effects of GPR. In their paper, Zhang and Hamori (2022) reveal that the Chinese geopolitical risk is influential on the economies of developing countries (Russia, Brazil and India) but displays lower causal impacts on the US economy.…”

Section: Literature Reviewmentioning

confidence: 99%

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Multi-faceted US uncertainty connectedness with domestic and global geopolitical risk

Kyriazis,

Economou

2023

JFEP

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Purpose This paper aims to explore the spillover impacts that domestic or global aspects of geopolitical risk generate on uncertainty. The latter is derived from a spectrum of different sources in the USA (economic policy, monetary policy, fiscal policy, national security, government spending, taxation) from 1985 up to November 2022. Design/methodology/approach Vector autoregressive schemes are used to detect causality and reverse causality between each aspect of geopolitical risk and each source of US uncertainty. Findings Notably, national security generates higher geopolitical risk by almost 8% in the first month but decreases GPR by 2% in the third month after the shock. USA is found to constitute a cornerstone as regards global peace and that the overall economic or monetary conditions or war status in the USA are remarkably more influential toward domestic and global geopolitical uncertainty than separate strands of fiscal policymaking. Reverse causality displays sizably weaker effects overall. Originality/value This study sheds light on the determinants of geopolitical risk and domestic instability by an international perspective and provides a compass for better decision-making for fiscal and monetary policymakers and market participants.

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Section: Literature Reviewmentioning

confidence: 99%

“…As concerns the first strand of relevant literature, which focuses on inter-connectedness of GPR with macroeconomic variables, among others, Caldara and Iacoviello (2022), Wang et al (2019), Bilgin et al (2020), Lee and Lee (2020) and Zhang and Hamori (2022) can be found.…”

Section: Literature Reviewmentioning

confidence: 99%

Multi-faceted US uncertainty connectedness with domestic and global geopolitical risk

Kyriazis,

Economou

2023

JFEP

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“…( 2022b ) argue that BRICS countries have acquired important roles in the world economy through international trade and financial and economic output. In this sense, Zhang and Hamori ( 2022 ) examined the connectedness between BRICS geopolitical risk and the U.S. macro economy and found evidence that shocks from the former have an impact on emerging economies. Regarding the BRICS forex markets, Salisu et al.…”

Section: Introductionmentioning

confidence: 99%

The linkage between Bitcoin and foreign exchanges in developed and emerging markets

BenSaïda

2023

Financ Innov

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This study investigates the connectedness between Bitcoin and fiat currencies in two groups of countries: the developed G7 and the emerging BRICS. The methodology adopts the regular (R)-vine copula and compares it with two benchmark models: the multivariate t copula and the dynamic conditional correlation (DCC) GARCH model. Moreover, this study examines whether the Bitcoin meltdown of 2013, selloff of 2018, COVID-19 pandemic, 2021 crash, and the Russia-Ukraine conflict impact the linkage with conventional currencies. The results indicate that for both currency baskets, R-vine beats the benchmark models. Hence, the dependence is better modeled by providing sufficient information on the shock transmission path. Furthermore, the cross-market linkage slightly increases during the Bitcoin crashes, and reaches significant levels during the 2021 and 2022 crises, which may indicate the end of market isolation of the virtual currency.

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“…However, national sovereign security and military security are always at the core of geopolitical risk [ 17 , 18 , 19 , 20 ]. In terms of the impact effect of geopolitical risk, the geopolitical risk will cause fluctuations in international finance, global energy and global food supply on the macro level [ 21 , 22 ], and will cause enterprises, investors and consumers to adjust their own business behavior, investment strategies and consumption structure on the micro level [ 23 , 24 , 25 ]. In terms of assessment tools, geopolitical risk assessment has gradually shifted from qualitative to quantitative and visual analysis [ 26 , 27 , 28 ].…”

Section: Introductionmentioning

confidence: 99%

Geopolitical Risk Evolution and Obstacle Factors of Countries along the Belt and Road and Its Types Classification

Shan

Ruan

et al. 2023

IJERPH

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As a great practice of building a community of shared future for mankind, the Belt and Road Initiative is facing geopolitical risk brought by great power games, regional conflicts and terrorism. It is an important mission of geopolitical research to scientifically deal with the geopolitical risk along the Belt and Road. This study systematically constructs the geopolitical risk assessment index system and analyzes the spatiotemporal evolution, obstacle factors and risk types of geopolitical risk of countries along the Belt and Road by using the entropy weight TOPSIS model, obstacle degree model and minimum variance method. The research results showed that: (1) From 2005 to 2020, the polarization of geopolitical risk in countries along the Belt and Road was very significant, and the overall trend of geopolitical risk tended to deteriorate. (2) The Middle East and Eastern Europe were the most important geopolitical risk zones along the Belt and Road, and Afghanistan, Iraq, Russia and Ukraine were the main high geopolitical risk centers, with significant risk spillover effects from these centers. (3) Terrorism and close relations with the United States were the most important obstacle factors for geopolitical risk in countries along the Belt and Road, and military intervention politics, trade dependence degree and foreign debt burden were important obstacle factors for geopolitical risk in countries along the Belt and Road. (4) Geopolitical risk along the Belt and Road can be divided into sovereign risk dominant type, sovereign and military risk dominant type, sovereign and major power intervention risk dominant type, and sovereign and military and major power intervention risk jointly dominated type, among which sovereign and military and major power intervention risk jointly dominated type was the most important geopolitical risk type. In order to scientifically deal with geopolitical risk in countries along the Belt and Road, it is necessary to strengthen geopolitical risk awareness, pay attention to the dominant geopolitical risk factors, strengthen the control of regional geopolitical risk spillover and formulate reasonable risk prevention and control scheme based on geopolitical risk types.

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A connectedness analysis among BRICS’s geopolitical risks and the US macroeconomy

Cited by 18 publications

References 66 publications

Multi-faceted US uncertainty connectedness with domestic and global geopolitical risk

Multi-faceted US uncertainty connectedness with domestic and global geopolitical risk

The linkage between Bitcoin and foreign exchanges in developed and emerging markets

Geopolitical Risk Evolution and Obstacle Factors of Countries along the Belt and Road and Its Types Classification

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