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The impact of geopolitical risk on food prices: evidence from the TVP-SV-VAR model

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  • Qiang Liu

    (Jiangsu Ocean University)

  • Chen Xu

    (St. Edward’S University)

  • Zhenwei Xu

    (Jiangsu Ocean University)

Abstract

Geopolitical risk (GPR) has a substantial and dynamic influence on global food prices, especially during periods of heightened conflict. This paper employs the Time-Varying Parameter Vector Autoregressive (TVP-SV-VAR) model to investigate the evolving relationship between GPR and food prices using monthly data from January 1997 to August 2023. Our findings reveal significant time-varying effects of GPR, oil prices, the U.S. dollar (USD), and global economic policy uncertainty (GEPU) on food prices, with pronounced shifts observed during key geopolitical events such as the Russia-Ukraine conflict. Notably, GPR has an immediate positive effect on food prices during intense conflict, though its influence varies across different time periods and events. These findings hold important policy implications for addressing food price volatility and guiding investment strategies, particularly in commodity and agricultural markets.

Suggested Citation

  • Qiang Liu & Chen Xu & Zhenwei Xu, 2025. "The impact of geopolitical risk on food prices: evidence from the TVP-SV-VAR model," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 49(2), pages 450-473, June.
    • Handle: RePEc:spr:jecfin:v:49:y:2025:i:2:d:10.1007_s12197-025-09710-4
    DOI: 10.1007/s12197-025-09710-4
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    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market

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