Assessing Dynamic Relationships Between Geopolitical Risks and Energy-Related Uncertainty: New Perspectives From the R2 Decomposed Linkage Method

Le Thanh Ha

Discrete Dynamics in Nature and Society, 2025, vol. 2025, 1-30

Abstract: Given their growing complexity, a deeper comprehension of the connections between geopolitical risks and energy-related uncertainties is needed. Our analysis uses the R2 deconstructed linkage approach to identify relationships, distinguishing between contemporaneous and delayed links. Using this unique method, the return transmission mechanism between the monthly crude oil volatility (OVX), the Standard & Poor’s 500 Index (SP500), the Geopolitical Risk Index (GPR), and the energy-related uncertainty indices (EUI) is investigated. The time frame for our investigation is January 2017–October 2022. Energy uncertainty was driven by lagged linkage in early 2020 and by both connections from late 2021 onward. These observations highlight the connection between geopolitical risks and energy uncertainty, offering policymakers helpful direction to lessen negative effects and improve market resilience and stability.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:hin:jnddns:5532052

DOI: 10.1155/ddns/5532052

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