Geopolitical Shocks And Commodity Market Dynamics: New Evidence From The Russian-Ukraine Conflict

Joshua Aizenman, Robert Lindahl, David Stenvall and Gazi Uddin

No 31950, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We investigate the event-based geopolitical shocks from the Russian invasion of Ukraine on agricultural and energy commodities using daily event-based structural vector autoregression (SVAR). We find that the geopolitical shock affects the markets of wheat (2%), corn (1%) and European natural gas (7.5%). However, substantial heterogeneity is observed among the agricultural and energy markets. Geopolitical risk stemming from the Russia-Ukraine conflict affects the European natural gas market more strongly than the US and Asian markets. The regional segment of natural gas markets could explain this. Finally, our analysis explores how geopolitical news affects the dynamics of stock, currency, and bond markets.

JEL-codes: F30 F50 G10 G14 (search for similar items in EconPapers)
Date: 2023-12
New Economics Papers: this item is included in nep-cis, nep-ene and nep-tra
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Published as Joshua Aizenman & Robert Lindahl & David Stenvall & Gazi Salah Uddin, 2024. "Geopolitical shocks and commodity market dynamics: New evidence from the Russia-Ukraine conflict," European Journal of Political Economy, vol 85.

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