Measuring Geopolitical Risks

Politics and international relations directly impact market conditions and geopolitical risk runs high during major crises like 9/11, the Iraq war or the Russian invasion of Ukraine. Elevated geopolitical risk leads to decline in real activity, lower stock returns and capital flows away from emerging markets and investors often struggle to correctly price in these effects. Can we quantify and systematically score the risk of disputes and hostilities between countries given the complexity of the context and the developments? This event is part of a series of events on the economic and financial applications of alternative data sponsored by Capital Fund Management (CFM) and Program for Economic Research (PER) at Columbia University’s Department of Economics.

This event will feature a talk by Matteo Iacoviello, Associate Director Division of International Finance, Federal Reserve Board, who will present his work on employing textual analysis of news articles to build a geopolitical risk index. There will also be a panel discussion with Simona Abis, Assistant Professor of Finance Columbia Business School, Matthieu Gomez, Assistant Professor of Economics Columbia University, and Phil Seager, Head of Absolute Return, for CFM. The panel will be moderated by Jose Scheinkman, Charles and Lynn Zhang Professor of Economics at Columbia University.

This event has passed.

Click here for zoom recording. 

Click here for slides presented by Matteo Iacoviello