Track 06Module 1 of 511 sources
Measuring geopolitical risk and how it prices
Use risk indices and market prices together to decide whether an event matters for a portfolio.
Key ideas
- Most geopolitical shocks cause a brief sell-off that reverses within weeks. The ones that last are those that change energy supply, trade routes or policy.
- Threats move markets more than acts. Uncertainty is priced when it rises, and often unwinds when the event happens.
- The transmission runs through oil, the dollar, gold, volatility and defence spending. Check whether those have moved before believing a headline.
- Policy uncertainty slows investment and hiring. It is a growth story as much as a risk story.
Start hereWatch or read these first. They carry the core idea.
How Geopolitics Moves Markets: Defense, Gold, and Energy Explained
Video · Global X Canada · 2:17
The main channels in two minutes.
Data
Geopolitical Risk (GPR) Index
Caldara and Iacoviello
A daily index of geopolitical risk built from news text, with a century of history.
Data
Geopolitical Risk Dashboard
BlackRock Investment Institute
A ranked list of current risks with a market attention score for each.
CoreThe standard references. Work through them once the idea is clear.
Paper
Measuring Geopolitical Risk
Caldara, Iacoviello · 2022 · American Economic Review · doi:10.1257/aer.20191823
The paper behind the index. Shows higher risk predicts lower investment and employment.
Paper
Measuring Economic Policy Uncertainty
Baker, Bloom, Davis · 2016 · The Quarterly Journal of Economics · doi:10.1093/qje/qjw024
The economic policy uncertainty index and its effects.
Data
Report
Data
Data
CrisisWatch monthly conflict tracker
International Crisis Group
A monthly bulletin on where conflicts are worsening or easing.
Book
Go deeperResearch, primary sources and data for when you want the detail.
Data
Practice
Take the top geopolitical headline today. Write which of oil, gold, the dollar and volatility should move if it matters. Check the Connections page to see whether they have.
See it live
Where this leads
06.2 · Geopolitics and MarketsEnergy, chokepoints and commoditiesKnow the physical routes and players behind oil, gas and metals, and what a disruption means for India.05.6 · Macro and LiquidityCross-asset: how stocks, bonds, oil, gold and currencies move togetherUse relationships between markets to confirm or question a view, and notice when a relationship changes.