# What is geopolitical risk, and how do I measure it before a move?

Geopolitical risk is the chance that wars, terrorism or tension between states disrupt your life, money or plans. You can track it with the Caldara and Iacoviello Geopolitical Risk Index, which has country indexes for 44 countries, and pair it with the World Bank's Political Stability score.

Geopolitical risk covers threats and events such as wars, military buildups, nuclear threats and terror acts. These can change prices, trade routes, travel and investment in a country.

The best known measure is the Geopolitical Risk Index by economists Dario Caldara and Matteo Iacoviello, published in the American Economic Review in 2022. Each month it counts the share of newspaper articles about adverse geopolitical events.

The recent index starts in 1985 and uses 10 newspapers. A historical version starts in 1900. Country indexes cover 44 countries. Their Federal Reserve research found that higher geopolitical risk comes before lower investment and employment.

The index has limits. Its 10 newspapers are based in the US, UK and Canada, so it reflects what those papers cover. Pair it with the World Bank's Political Stability indicator, which covers more than 200 economies.

Then map your own exposure. Ask how a conflict nearby would affect your flights home, energy prices, banking links and residency rules. The same event can matter a lot to one household and little to another.

## Sources

- [Geopolitical Risk (GPR) Index](https://www.matteoiacoviello.com/gpr.htm), Matteo Iacoviello
- [Measuring Geopolitical Risk](https://www.federalreserve.gov/econres/ifdp/measuring-geopolitical-risk.htm), Board of Governors of the Federal Reserve System
- [Worldwide Governance Indicators](https://www.worldbank.org/en/publication/worldwide-governance-indicators), World Bank

Facts checked 2026-10-08. Next review by 2027-04-08. Written and reviewed by Todd Allyn, Sovereo Intelligence Research. Canonical page: https://www.sovereo.com/answers/what-is-geopolitical-risk-and-how-do-i-measure-it-before-a-move/
Educational research, not legal, tax, immigration or financial advice.