Political Risk, Populism and the Economy

• 成果类型: Article
• 署名作者: Balduzzi, Pierluigi; Brancati, Emanuele; Brianti, Marco; Schiantarelli, Fabio
• 署名单位: Boston College; Boston College; Sapienza University Rome; IZA Institute Labor Economics; University of Alberta
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1093/ej/uead017
• 发表日期: 2023
• 页码: 1677-1704
• 关键词: monetary-policy surprises; uncertainty; impacts

摘要

We study the financial and real effects of political risk shocks for Italy, Spain, Ireland, Portugal and Greece between 2008 and 2019. We build an instrument for these shocks using the changes of the sovereign yield spread around political and policy dates, and estimate their effects in the context of local projection. We show that adverse political risk shocks have negative effects on domestic financial markets and in some countries generate spillovers on the spreads of other eurozone economies. Moreover, in Italy populism-related political risk shocks have a larger effect on financial markets and they harm the real economy.