Researchers Metiu and Völpel develop the Geopolitical Hybrid Threats index globally; negative demand shock with rising debt.
Researchers Metiu and Völpel develop the Geopolitical Hybrid Threats index globally; negative demand shock with rising debt. Geopolitical Hybrid Threats83rd edition – June 2026 What are geopolitical hybrid threats and what are their economic consequences? Analysing the macroeconomic and financial impact of hybrid threat shocks Rising geopolitical tensions are leading to an increase in hybrid threats such as cyberattacks, infrastructure sabotage, espionage, economic and political coercion, the spread of disinformation, and other forms of hybrid warfare. But how do these hybrid threats affect the economy and financial markets? To answer this question, we develop a new index that measures geopolitical hybrid threats and examine their macroeconomic and financial impact. We find that hybrid threats primarily suppress aggregate demand – through heightened uncertainty, weaker confidence, and tighter financial conditions. At the same time, they trigger policy responses, such as increased defence spending and monetary policy easing. These findings contrast with the predominantly supply-side effects of geopolitical risk documented in the literature. ...