Macroeconomic effects of global policy and financial risks

Globalization has brought larger spillovers of global risks across borders since the 2000s. Specifically, policy risk sharply increased due to uncertainty in major countries recent decade as are shown Brexit, US-China trade friction and COVID-19 pandemic. This paper empirically investigates effects both financial on macroeconomy markets eight from January 1997 June 2020. We employed a structural vector autoregressive framework obtain interesting empirical results. First, have recessionary macroeconomy, reducing production, deteriorating employment, lowering long-term interest rates, depressing prices trade. Second, also markets, plunging stock prices, appreciating safe-haven currencies depreciating other currencies. Third, macroeconomies respond more significantly than risk. Fourth, vary depending countries.