Posts tagged political risk theory
What is Political Risk?
What is Political Risk?

When I first got a job at a political risk firm, my parents said, “That sounds great. What is it?”

One of the main problems with practicing political risk is that it can be easily defined too narrowly or too broadly. When the former, huge disruptions can happen without being foreseen. When the latter, the analysis starts to resemble general punditry and organization fail to see the value.

To correct this, let’s start with some basic definitions that show how we look at the best way to confront the field.

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Chris Oatespolitical risk theory
How can we measure political risk when we can’t measure political risk?

A Martin Wolf column in the Financial Times earlier this month discusses how political risk, and political developments more generally, are impacting global markets. It’s a good article, but one odd item jumped out at me.

At the end of the article, Wolf includes a chart of the Geopolitical Risk (GPR) index, developed by Dario Caldara and Matteo Iacoviello, both economists at the Federal Reserve (more info in the paper “Measuring Geopolitical Risk” by Dario Caldara and Matteo Iacoviello at https://www2.bc.edu/matteo-iacoviello/gpr.htm).

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Political Risk, EconomicsChris Oatespolitical risk theory, political risk metrics