We investigate how corporate stock returns respond to geopolitical risk in the case of South Korea, which has experienced large and unpredictable geopolitical swings that originate from North Korea. To do so, a monthly index of geopolitical risk from North Korea (the GPRNK index) is constructed...

Rent seeking contest shapes the risk preference of the contestants. It instills in the weaker contestant who has little to lose and much to gain a preference for risk taking, and the weaker the contestant, the stronger the instilled preference for risk taking. On the other hand, it causes the...

Although most empirical studies conclude that uncertainty delays firms' investments based on real options theory, empirical evidence regarding the impact of uncertainty on innovation is mixed. This study examines the impact of geopolitical risk (GPR) on corporate research and development (R&D)...

This study investigates the effects of geopolitical risk (GPR) on asset markets in 17 advanced countries from 1899 to 2016 using novel GPR indices. First, compared with housing returns, stock returns are more sensitive to increases in GPR: on average, an increase in GPR significantly decreases...

We find that shocks to aggregate geopolitical uncertainty are associated with an average decline in firm-level capital investment. The decline in investments increases in the degree of external financial constraints faced by firms, with the effect being stronger for more irreversible...

In this essay, written for a symposium on surveillance for the University of Chicago Law Review, I examine some common difficulties in the way that liberty is balanced against security in the context of data mining. Countless discussions about the trade-offs between security and liberty begin by...

We present a monthly indicator of geopolitical risk based on a tally of newspaper articles covering geopolitical tensions, and examine its evolution and effects since 1985. The geopolitical risk (GPR) index spikes around the Gulf War, after 9/11, during the 2003 Iraq invasion, during the 2014...

Public choice theorists generally assume that bureaucrats seek to maximize their own utility functions, subject to externally imposed constraints. Changes in constraint values may, therefore, be expected to result in predictable changes in the behavior of most organizations, not just businesses....

This inquiry concludes that America's bloated military base structure results less from demands for political 'pork' than from a decision-making process that inevitably results in a stalemate. This finding is encouraging. With a little imagination, we ought to be able to design a process that...

This essay shows how to align governance mechanisms to achieve public purposes more effectively. First, it explains the alternative governance arrangements employed by public agencies, which boil down to four elementary mechanism designs. Two of the mechanisms (outlay budgets and fixed-price...