This paper develops a general equilibrium model to analyze the impact of political uncertainty on stock prices. The model suggests that political uncertainty leads to a higher risk premium, especially in weaker economic conditions. Political uncertainty reduces the value of the implicit put protection provided by the government and increases stock volatility and correlation. Empirical evidence supports these predictions, showing that political uncertainty is associated with higher risk premiums and more volatile stock returns. The authors also explore the effects of political uncertainty on the equity risk premium, volatility, and correlation, finding that political uncertainty has a significant impact on these measures.This paper develops a general equilibrium model to analyze the impact of political uncertainty on stock prices. The model suggests that political uncertainty leads to a higher risk premium, especially in weaker economic conditions. Political uncertainty reduces the value of the implicit put protection provided by the government and increases stock volatility and correlation. Empirical evidence supports these predictions, showing that political uncertainty is associated with higher risk premiums and more volatile stock returns. The authors also explore the effects of political uncertainty on the equity risk premium, volatility, and correlation, finding that political uncertainty has a significant impact on these measures.