Geopolitical Risk Shocks: Macroeconomic Effects in Bolivia, Chile, and Peru

Fecha de Publicación
Autores
Osmar Bolivar; Christian Huanto Quispe
Referencia
Cuadernos de Investigación Económica Boliviana (2023) Vol. 6(2), 62-83
Palabras claves
Geopolitical risk
BSVAR
Inflation
interest rates
Economic Growth
commodity prices.
Geopolitical Risk Shocks: Macroeconomic Effects in Bolivia, Chile, and Peru

This paper analyzes the macroeconomic impacts of geopolitical risk shocks on Bolivia, Chile, and Peru, employing Bayesian Structural Vector Autoregressive (BSVAR) models. Geopolitical risk shocks significantly raise inflation and interest rates in Chile and Peru, with food and energy inflation being the most affected, while Bolivia shows resilience, presumably due to its distinct economic framework. Commodity prices, particularly energy and agriculture, experience persistent impacts, highlighting the importance of commodity-specific dynamics. The 2022 Russia-Ukraine conflict exacerbated these effects, driving price volatility and global market disruptions. These findings provide insights into some of the transmission mechanisms of geopolitical shocks and highlight the importance of tailored strategies to mitigate their adverse effects.