COUNTRY RISK AND POLITICAL INSTABILITY: A VUCA WORLD APPROACH
The last three years were characterized by a climate of drastic change due to a cumulus of disturbances and crises, namely the COVID-19 pandemic, inflation, energy crisis, military conflicts, banking fragilities, populism, disinformation, and the idea of deglobalization. These types of events may...
Saved in:
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | deu |
| Published: |
University of Oradea
2023-07-01
|
| Series: | Annals of the University of Oradea: Economic Science |
| Subjects: | |
| Online Access: | https://anale.steconomiceuoradea.ro/en/wp-content/uploads/2024/02/AUOES.July_.202333.pdf |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Summary: | The last three years were characterized by a climate of drastic change due to a
cumulus of disturbances and crises, namely the COVID-19 pandemic, inflation, energy
crisis, military conflicts, banking fragilities, populism, disinformation, and the idea of
deglobalization. These types of events may be interpretated either as antecedents of new
and complex categories of risks or as stimulus for certain risks that have long been ignored.
One central focus for worldwide policymakers is presently the country risk with all its
components (sovereign risk, political risk, market risk, or systemic risk). Furthermore, due
to the increase in public and private debt, the risks to which economies are exposed have
multiplied. Is this the end of an era or just a temporary disequilibrium? This is one of the
key questions among economists, academics, and policy makers around the world. The main
purpose of this research is to analyse whether the Russian invasion of Ukraine negatively
impacted the country risk of countries situated in the geographical proximity of the conflict
area (Romania, Bulgaria, Estonia, Hungary, Czechia, Latvia, Lithuania, Poland, and
Slovakia), as well as to determine whether relevant macroeconomic indicators such as
debt/GDP, GDP/capita, inflation, or trade openness were deteriorated due to the war. The
findings of this research reveal that all the analysed macroeconomic indicators deteriorated
as a consequence of the high degree of uncertainty concerning the future economic
prospects of these countries, especially inflation and debt/GDP. The results also indicate
that the country ratings of the investigated group of countries were severely impacted by
the Russian invasion of Ukraine. Although data corresponding for year 2023 show a slight
improvement, the existing uncertainty continues to generate a disruptive effect on the
markets. |
|---|---|
| ISSN: | 1222-569X 1582-5450 |