Insurance activity,real output,and geopolitical risk: Fresh evidence from BRICS |
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Institution: | 1. School of Business, Central South University, Changsha 410083, China;2. Institute of Metal Resources Strategy, Central South University, Changsha 410083, China |
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Abstract: | This paper fills some empirical gaps by evaluating the causal associations among insurance premiums, real output, and geopolitical risk in BRICS (Brazil, Russia, India, China, South Africa) from 1985 to 2017. We utilize a newly-developed Granger-causality quantile analysis to assess the causal relationships among the series under consideration in each distribution quantile. Our empirical results reveal unidirectional causality that runs from real output and geopolitical risk to insurance activities in Brazil and South Africa. We also observe bi-directional lower-tail causality among real output, insurance premiums, and geopolitical risk in Russia. Findings also present bi-directional causality among real output, insurance premiums, and geopolitical risk at different quantiles. Knowledge of these causal relationships can prevent governments from conducting a ‘one-size-fits-all’ policy. |
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Keywords: | Geopolitical risks Real output Insurance premiums BRICS C22 G22 O11 |
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