Geopolitical risks and recessions in a panel of advanced economies: evidence from over a century of data |
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Authors: | Matthew W. Clance Rangan Gupta |
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Affiliation: | Department of Economics, University of Pretoria, Pretoria, South Africa |
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Abstract: | This paper uses a panel of 17 advanced countries over the annual period of 1899–2013, to analyze for the first time, the role played by geopolitical risks in predicting recessions. After controlling for other standard predictors based on a logit model, we find that while aggregate geopolitical risks do not have any predictive ability, geopolitical acts enhance the probability of future recessions, with geopolitical threats reducing the same. |
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Keywords: | Geopolitical risks recessions advanced economies panel data logit model |
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