The paper by Caldara and Iacoviello presents a monthly indicator of geopolitical risk (GPR) based on newspaper articles covering geopolitical tensions. The GPR index spikes around significant events such as the Gulf War, 9/11, the 2003 Iraq invasion, the 2014 Russia-Ukraine crisis, and the Paris terrorist attacks. High geopolitical risk is associated with a decline in real activity, lower stock returns, and capital flows away from emerging economies towards advanced economies. The authors decompose the index into threats and acts components, finding that the adverse effects are driven more by the threat of adverse geopolitical events. Extending the index back to 1900, they find that geopolitical risk rose dramatically during World War I and II, was elevated in the early 1980s, and has drifted upward since the 21st century. The construction of the GPR index involves defining geopolitical risk, measuring it through automated text searches in leading international newspapers, and conducting an audit to ensure accuracy. The index is compared to other proxies for geopolitical risk and macroeconomic uncertainty, and its economic effects are analyzed using vector autoregressive models. The study highlights the importance of geopolitical risks in shaping macroeconomic and financial cycles.The paper by Caldara and Iacoviello presents a monthly indicator of geopolitical risk (GPR) based on newspaper articles covering geopolitical tensions. The GPR index spikes around significant events such as the Gulf War, 9/11, the 2003 Iraq invasion, the 2014 Russia-Ukraine crisis, and the Paris terrorist attacks. High geopolitical risk is associated with a decline in real activity, lower stock returns, and capital flows away from emerging economies towards advanced economies. The authors decompose the index into threats and acts components, finding that the adverse effects are driven more by the threat of adverse geopolitical events. Extending the index back to 1900, they find that geopolitical risk rose dramatically during World War I and II, was elevated in the early 1980s, and has drifted upward since the 21st century. The construction of the GPR index involves defining geopolitical risk, measuring it through automated text searches in leading international newspapers, and conducting an audit to ensure accuracy. The index is compared to other proxies for geopolitical risk and macroeconomic uncertainty, and its economic effects are analyzed using vector autoregressive models. The study highlights the importance of geopolitical risks in shaping macroeconomic and financial cycles.