In this paper, we analyse the effects of a shock to global fnancial uncertainty and risk aversion on real economic … returns from around the world. We then study how shocks to the factor affect economic activity in 36 advanced and emerging … higher levels of external debt, less developed financial sectors, and higher risk rating. …

heightened risk aversion, leading to shifts in investment portfolio allocations and cross-border capital flows; a nd t he r eal e …

declines in output, in ation, and the interest rate. Moreover, we document strong global impacts, making the world move in a …