Economic knock-on effects of Russia’s geopolitical risk on advanced economies: a Bayesian global VAR approach
Journal: Macroeconomic Dynamics
Year: 2025

Abstract Using a Bayesian Global VAR model as a methodological tool, we analyze how heightened geopolitical risk shocks propagate across advanced economies and quantify the economic effects of these events. The global VAR impulse response functions in response to the skyrocketing Russian geopolitical risk after Russia’s invasion of Ukraine revealed a contraction of GDP and an increase in inflation. Eastern European and Baltic countries are particularly affected by the Russian geopolitical risk s