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Measuring Geopolitical Risk
Report

Measuring Geopolitical Risk


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Editorial Rating

8

Qualities

  • Analytical
  • Overview
  • Hot Topic

Recommendation

Business leaders, investors and monetary officials consider a variety of factors when developing their strategies. But it is geopolitical risk (GPR) that presents the greatest concern for these stakeholders, and a lack of measurement capacity and accuracy can stymie investment and trade. Economists Dario Caldara and Matteo Iacoviello have built an index that assesses the levels of GPR over time and explains how these perceived risks affect business and government decision making. getAbstract recommends this substantive report to executives, investors and policy experts for its detailed examination of a strategically significant hazard.

Take-Aways

  • Geopolitical risk (GPR) is a primary component of public and private sector strategic decisions.
  • A 2017 Gallup survey found that 75% of investors cited GPR as a greater concern than “political and economic uncertainty.” 
  • A “monthly index of GRP” that can gauge the risk over decades is based on three steps: “definition, measurement and audit.” 

About the Authors

Dario Caldara and Matteo Iacoviello are economists with the Board of Governors of the Federal Reserve System.


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