Geopolitical hybrid threats

Norbert Metiu and Martin Völpel

No 11/2026, Discussion Papers from Deutsche Bundesbank

Abstract: Hybrid threats encompass a range of hostile activities aimed at achieving geopolitical objectives, including cyberattacks, infrastructure sabotage, espionage, economic and political coercion, disinformation, and other forms of hybrid warfare. We construct a Geopolitical Hybrid Threat (GHT) index based on newspaper coverage of these activities. The index surges from the mid-2010s, surpassing the high levels observed during the late Cold War. Using a narrative instrument in a vector autoregression, we find that hybrid threat shocks suppress aggregate demand by raising uncertainty, reducing confidence, and tightening financial conditions, while triggering policy responses in the form of increased defense spending and monetary easing.

Keywords: Geopolitical Risk; Hybrid Threats; Proxy VAR; Textual Analysis (search for similar items in EconPapers)
JEL-codes: C43 E32 F51 H56 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bubdps:340011

DOI: 10.71734/DP-2026-11

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