{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,4,9]],"date-time":"2026-04-09T08:52:18Z","timestamp":1775724738271,"version":"3.50.1"},"reference-count":48,"publisher":"Wiley","license":[{"start":{"date-parts":[[2026,4,9]],"date-time":"2026-04-09T00:00:00Z","timestamp":1775692800000},"content-version":"vor","delay-in-days":0,"URL":"http:\/\/onlinelibrary.wiley.com\/termsAndConditions#vor"},{"start":{"date-parts":[[2026,4,9]],"date-time":"2026-04-09T00:00:00Z","timestamp":1775692800000},"content-version":"tdm","delay-in-days":0,"URL":"http:\/\/doi.wiley.com\/10.1002\/tdm_license_1.1"}],"funder":[{"DOI":"10.13039\/501100001871","name":"Funda\u00e7\u00e3o para a Ci\u00eancia e a Tecnologia","doi-asserted-by":"publisher","id":[{"id":"10.13039\/501100001871","id-type":"DOI","asserted-by":"publisher"}]}],"content-domain":{"domain":["onlinelibrary.wiley.com"],"crossmark-restriction":true},"short-container-title":["Scottish J Political Eco"],"abstract":"<jats:title>ABSTRACT<\/jats:title>\n                  <jats:p>We examine how geopolitical risks (GPR) affect fiscal (FS) and external sustainability (ES) across 27 European Union economies over 2001Q4\u20132022Q3. We apply a two\u2010step strategy: first, estimating time\u2010varying FS and ES coefficients using Schlicht's (2021) approach; second, analyzing their response to geopolitical risks through a panel framework with bootstrapped inference. Our results show that higher GPR systematically weakens both fiscal and external sustainability, with the effects on ES between three and six times larger than those on FS. Domestic risks exert stronger pressures than global ones, while spillovers from neighboring\u2010country GPR further amplify external imbalances, underscoring the interconnectedness of EU economies. The analysis also reveals structural shifts around major crises\u2014including the global financial crisis, the European sovereign debt crisis, and the Russia\u2010Ukraine war\u2014that mark turning points in sustainability dynamics. These findings highlight the importance of maintaining fiscal buffers, diversifying trade, and enhancing regional coordination to mitigate the destabilizing effects of geopolitical tensions.<\/jats:p>","DOI":"10.1111\/sjpe.70059","type":"journal-article","created":{"date-parts":[[2026,4,9]],"date-time":"2026-04-09T07:55:11Z","timestamp":1775721311000},"update-policy":"https:\/\/doi.org\/10.1002\/crossmark_policy","source":"Crossref","is-referenced-by-count":0,"title":["The Pressure Is on: How Geopolitical Tensions Impact Institutional Fiscal and External Stability Responses"],"prefix":"10.1111","author":[{"given":"Ant\u00f3nio","family":"Afonso","sequence":"first","affiliation":[{"name":"Instituto Superior de Economia e Gest\u00e3o (ISEG) Universidade de Lisboa  Lisboa Portugal"},{"name":"Research in Economics and Mathematics (REM) and Research Unit on Complexity and Economics (UECE) ISEG, Universidade de Lisboa  Lisbon Portugal"},{"name":"CESifo Research Fellow Center for Economic Studies and Ifo Institute  Munich Germany"}]},{"given":"Jos\u00e9","family":"Alves","sequence":"additional","affiliation":[{"name":"Instituto Superior de Economia e Gest\u00e3o (ISEG) Universidade de Lisboa  Lisboa Portugal"},{"name":"Research in Economics and Mathematics (REM) and Research Unit on Complexity and Economics (UECE) ISEG, Universidade de Lisboa  Lisbon Portugal"},{"name":"CESifo Research Fellow Center for Economic Studies and Ifo Institute  Munich Germany"}]},{"ORCID":"https:\/\/orcid.org\/0000-0002-7171-5076","authenticated-orcid":false,"given":"Jo\u00e3o","family":"Jalles","sequence":"additional","affiliation":[{"name":"Instituto Superior de Economia e Gest\u00e3o (ISEG) Universidade de Lisboa  Lisboa Portugal"},{"name":"Research in Economics and Mathematics (REM) and Research Unit on Complexity and Economics (UECE) ISEG, Universidade de Lisboa  Lisbon Portugal"},{"name":"Economics for Policy and Centre for Globalization and Governance, Nova School of Business and Economics Universidade Nova de Lisboa  Carcavelos Portugal"},{"name":"IPAG Business School  Paris France"}]},{"given":"Sofia","family":"Monteiro","sequence":"additional","affiliation":[{"name":"Instituto Superior de Economia e Gest\u00e3o (ISEG) Universidade de Lisboa  Lisboa Portugal"},{"name":"Research in Economics and Mathematics (REM) and Research Unit on Complexity and Economics (UECE) ISEG, Universidade de Lisboa  Lisbon Portugal"}]}],"member":"311","published-online":{"date-parts":[[2026,4,9]]},"reference":[{"issue":"1","key":"e_1_2_9_2_1","doi-asserted-by":"crossref","first-page":"19","DOI":"10.1628\/0015221053722532","article-title":"Fiscal Sustainability: The Unpleasant European Case","volume":"61","author":"Afonso A.","year":"2005","journal-title":"sFinanzArchiv: Public Finance Analysis"},{"key":"e_1_2_9_3_1","doi-asserted-by":"crossref","DOI":"10.1016\/j.ejpoleco.2024.102550","article-title":"Beyond Borders: Assessing the Influence of Geopolitical Tensions on Sovereign Risk Dynamics","volume":"83","author":"Afonso A.","year":"2024","journal-title":"European Journal of Political Economy"},{"issue":"2","key":"e_1_2_9_4_1","doi-asserted-by":"crossref","first-page":"320","DOI":"10.1111\/twec.12709","article-title":"Assessing the Sustainability of External Imbalances in the European Union","volume":"42","author":"Afonso A.","year":"2019","journal-title":"World Economy"},{"issue":"3","key":"e_1_2_9_5_1","doi-asserted-by":"crossref","first-page":"244","DOI":"10.1002\/ijfe.1582","article-title":"Euro Area Time\u2010Varying Fiscal Sustainability","volume":"22","author":"Afonso A.","year":"2017","journal-title":"International Journal of Finance and Economics"},{"issue":"4","key":"e_1_2_9_6_1","doi-asserted-by":"crossref","first-page":"731","DOI":"10.1007\/s10290-009-0034-1","article-title":"What Do We Really Know About Fiscal Sustainability in the EU? A Panel Data Diagnostic","volume":"145","author":"Afonso A.","year":"2010","journal-title":"Review of World Economics"},{"key":"e_1_2_9_7_1","doi-asserted-by":"crossref","unstructured":"Ahir H. N.Bloom andD.Furceri.2022.\u201cThe World Uncertainty Index.\u201d(National bureau of Economic Research Working Paper 29763).","DOI":"10.3386\/w29763"},{"key":"e_1_2_9_8_1","doi-asserted-by":"crossref","first-page":"92","DOI":"10.1016\/j.jmoneco.2022.07.005","article-title":"How Sovereign Is Sovereign Credit Risk? Global Prices, Local Quantities","volume":"131","author":"Augustin P.","year":"2022","journal-title":"Journal of Monetary Economics"},{"issue":"4","key":"e_1_2_9_9_1","doi-asserted-by":"crossref","first-page":"441","DOI":"10.1080\/00036846.2013.851779","article-title":"Sustainability of External Imbalances in the OECD Countries","volume":"46","author":"Bajo\u2010Rubio O.","year":"2014","journal-title":"Applied Economics"},{"issue":"2","key":"e_1_2_9_10_1","doi-asserted-by":"crossref","first-page":"463","DOI":"10.1007\/s00168-021-01081-y","article-title":"Geopolitical Risk Spillovers and Its Determinants","volume":"68","author":"Balli F.","year":"2022","journal-title":"Annals of Regional Science"},{"issue":"4","key":"e_1_2_9_11_1","doi-asserted-by":"crossref","first-page":"663","DOI":"10.1080\/14697688.2018.1508879","article-title":"Gold Price Dynamics and the Role of Uncertainty","volume":"19","author":"Beckmann J.","year":"2019","journal-title":"Quantitative Finance"},{"issue":"6","key":"e_1_2_9_12_1","doi-asserted-by":"crossref","first-page":"3975","DOI":"10.1287\/mnsc.2021.4068","article-title":"The Time Variation in Risk Appetite and Uncertainty","volume":"68","author":"Bekaert G.","year":"2021","journal-title":"Management Science"},{"issue":"4","key":"e_1_2_9_13_1","doi-asserted-by":"crossref","first-page":"1329","DOI":"10.1162\/003355302320935043","article-title":"An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output","volume":"117","author":"Blanchard O.","year":"2002","journal-title":"Quarterly Journal of Economics"},{"issue":"3","key":"e_1_2_9_14_1","doi-asserted-by":"crossref","first-page":"623","DOI":"10.3982\/ECTA6248","article-title":"The Impact of Uncertainty Shocks","volume":"77","author":"Bloom N.","year":"2009","journal-title":"Econometrica"},{"key":"e_1_2_9_15_1","doi-asserted-by":"crossref","unstructured":"Bobasu A. L.Quaglietti andM.Ricci.2023.\u201cTracking Global Economic Uncertainty: Implications for the Euro Area.\u201d(ECB Working Paper Series 2541).","DOI":"10.1057\/s41308-023-00216-9"},{"issue":"3","key":"e_1_2_9_16_1","doi-asserted-by":"crossref","first-page":"949","DOI":"10.1162\/003355398555793","article-title":"The Behavior of U. S. Public Debt and Deficits","volume":"113","author":"Bohn H.","year":"1998","journal-title":"Quarterly Journal of Economics"},{"key":"e_1_2_9_17_1","doi-asserted-by":"crossref","DOI":"10.1016\/j.ribaf.2023.102048","article-title":"Global Geopolitical Risk and Inflation Spillovers Across European and North American Economies","volume":"66","author":"Bouri E.","year":"2023","journal-title":"Research in International Business and Finance"},{"key":"e_1_2_9_18_1","doi-asserted-by":"crossref","first-page":"1","DOI":"10.1016\/j.jmoneco.2018.08.004","article-title":"Oil Price Elasticities and Oil Price Fluctuations","volume":"103","author":"Caldara D.","year":"2019","journal-title":"Journal of Monetary Economics"},{"issue":"4","key":"e_1_2_9_19_1","doi-asserted-by":"crossref","first-page":"1194","DOI":"10.1257\/aer.20191823","article-title":"Measuring Geopolitical Risk","volume":"112","author":"Caldara D.","year":"2022","journal-title":"American Economic Review"},{"issue":"4","key":"e_1_2_9_20_1","doi-asserted-by":"crossref","first-page":"1289","DOI":"10.1016\/j.jce.2023.06.008","article-title":"Geopolitical Fragmentation and Trade","volume":"51","author":"Campos R. G.","year":"2023","journal-title":"Journal of Comparative Economics"},{"issue":"5","key":"e_1_2_9_21_1","doi-asserted-by":"crossref","first-page":"1221","DOI":"10.1257\/aer.91.5.1221","article-title":"Is the Price Level Determined by the Needs of Fiscal Solvency?","volume":"91","author":"Canzoneri M. B.","year":"2001","journal-title":"American Economic Review"},{"issue":"4","key":"e_1_2_9_22_1","doi-asserted-by":"crossref","first-page":"868","DOI":"10.1057\/imfer.2015.38","article-title":"The Impact of the Global Financial Crisis on Banking Globalization","volume":"63","author":"Claessens S.","year":"2015","journal-title":"IMF Economic Review"},{"issue":"6","key":"e_1_2_9_23_1","doi-asserted-by":"crossref","first-page":"1329","DOI":"10.1111\/jeea.12184","article-title":"The Mystery of the Printing Press: Monetary Policy and Self\u2010Fulfilling Debt Crises","volume":"14","author":"Corsetti G.","year":"2016","journal-title":"Journal of the European Economic Association"},{"issue":"5","key":"e_1_2_9_24_1","doi-asserted-by":"crossref","first-page":"997","DOI":"10.1086\/250038","article-title":"Why Do More Open Economies Have Bigger Governments?","volume":"106","author":"Dani Rodrik D.","year":"1998","journal-title":"Journal of Political Economy"},{"key":"e_1_2_9_25_1","doi-asserted-by":"crossref","first-page":"151","DOI":"10.1093\/oso\/9780198850823.003.0005","volume-title":"Sovereign Debt: A Guide for Economists and Practitioners","author":"Debrun X.","year":"2019"},{"key":"e_1_2_9_26_1","unstructured":"European Commission.2023.\u201cEuropean Consilium Website.\u201dhttps:\/\/www.consilium.europa.eu\/en\/infographics\/how\u2010the\u2010russian\u2010invasion\u2010of\u2010ukraine\u2010has\u2010further\u2010aggravated\u2010the\u2010global\u2010food\u2010crisis\/."},{"issue":"2","key":"e_1_2_9_27_1","doi-asserted-by":"crossref","first-page":"362","DOI":"10.1162\/REST_a_00265","article-title":"Policy Volatility, Institutions, and Economic Growth","volume":"95","author":"Fat\u00e1s A.","year":"2013","journal-title":"Review of Economics and Statistics"},{"issue":"2","key":"e_1_2_9_28_1","doi-asserted-by":"crossref","first-page":"235","DOI":"10.1016\/j.jinteco.2012.03.006","article-title":"Capital Flow Waves: Surges, Stops, Flight, and Retrenchment","volume":"88","author":"Forbes K. J.","year":"2012","journal-title":"Journal of International Economics"},{"key":"e_1_2_9_29_1","doi-asserted-by":"crossref","unstructured":"Garcia\u2010Macia D.2023.\u201cThe Effects of Inflation on Public Finances.\u201d(IMF Working Paper WP\/23\/93).","DOI":"10.5089\/9798400241529.001"},{"issue":"1","key":"e_1_2_9_30_1","doi-asserted-by":"crossref","first-page":"102","DOI":"10.1162\/rest.2009.12023","article-title":"Collateral Damage: Trade Disruption and the Economic Impact of War","volume":"92","author":"Glick R.","year":"2010","journal-title":"Review of Economics and Statistics"},{"key":"e_1_2_9_31_1","doi-asserted-by":"crossref","first-page":"1026","DOI":"10.1016\/j.eap.2023.04.038","article-title":"Fiscal Sustainability, Monetary Policy and Economic Growth in the Euro Area: In Search of the Ultimate Causal Path","volume":"78","author":"Golpe A. A.","year":"2023","journal-title":"Economic Analysis and Policy"},{"issue":"4","key":"e_1_2_9_32_1","doi-asserted-by":"crossref","first-page":"515","DOI":"10.1007\/s40822-018-0118-0","article-title":"Effects of Geopolitical Risks on Trade Flows: Evidence From the Gravity Model","volume":"9","author":"Gupta R.","year":"2019","journal-title":"Eurasian Economic Review"},{"issue":"3","key":"e_1_2_9_33_1","doi-asserted-by":"crossref","first-page":"429","DOI":"10.1111\/j.1465-7295.1991.tb00837.x","article-title":"Is the Budget Deficit Too Large?","volume":"29","author":"Hakkio C. S.","year":"1991","journal-title":"Economic Inquiry"},{"issue":"2","key":"e_1_2_9_34_1","doi-asserted-by":"crossref","first-page":"239","DOI":"10.1016\/j.jmoneco.2012.10.011","article-title":"How Big (Small?) Are Fiscal Multipliers?","volume":"60","author":"Ilzetzki E.","year":"2013","journal-title":"Journal of Monetary Economics"},{"key":"e_1_2_9_35_1","unstructured":"International Monetary Fund (IMF).2023.\u201cThe Macroeconomic Impact of Global Geopolitical Fragmentation.\u201dWorld Economic Outlook October 2023 63\u201381."},{"key":"e_1_2_9_36_1","doi-asserted-by":"crossref","first-page":"206","DOI":"10.1016\/j.iref.2021.10.001","article-title":"Time\u2010Varying Geopolitical Risk and Oil Prices","volume":"77","author":"Ivanovski K.","year":"2022","journal-title":"International Review of Economics and Finance"},{"issue":"2","key":"e_1_2_9_37_1","doi-asserted-by":"crossref","first-page":"495","DOI":"10.1016\/j.jinteco.2012.07.001","article-title":"Global Banks and Crisis Transmission","volume":"89","author":"Kalemli\u2010Ozcan S.","year":"2013","journal-title":"Journal of International Economics"},{"issue":"5","key":"e_1_2_9_38_1","doi-asserted-by":"crossref","first-page":"1170","DOI":"10.1007\/s10797-018-9488-1","article-title":"A Test of Fiscal Sustainability in the EU Countries","volume":"25","author":"Lee K.","year":"2018","journal-title":"International Tax and Public Finance"},{"issue":"4","key":"e_1_2_9_39_1","doi-asserted-by":"crossref","first-page":"874","DOI":"10.1111\/twec.13336","article-title":"Economic Costs of the Russia\u2010Ukraine War","volume":"46","author":"Liadze I.","year":"2023","journal-title":"World Economy"},{"key":"e_1_2_9_40_1","unstructured":"Ludvigson S. C. S.Ma andS.Ng.2019.\u201cUncertainty and Business Cycles: Exogenous Impulse or Endogenous Response?\u201d(National Bureau of Economic Research Working Paper 21803)."},{"issue":"3","key":"e_1_2_9_41_1","doi-asserted-by":"crossref","first-page":"865","DOI":"10.1111\/j.1467-937X.2008.00492.x","article-title":"Make trade not war?","volume":"75","author":"Martin P.","year":"2008","journal-title":"Review of Economic Studies"},{"issue":"1","key":"e_1_2_9_42_1","doi-asserted-by":"crossref","DOI":"10.1080\/15140326.2023.2242110","article-title":"World Uncertainty and National Fiscal Balances","volume":"26","author":"Nguyen T. T. T.","year":"2023","journal-title":"Journal of Applied Economics"},{"issue":"2","key":"e_1_2_9_43_1","doi-asserted-by":"crossref","first-page":"279","DOI":"10.1162\/rest_a_00740","article-title":"A Tie That Binds: Revisiting the Trilemma in Emerging Market Economies","volume":"101","author":"Obstfeld M.","year":"2019","journal-title":"Review of Economics and Statistics"},{"key":"e_1_2_9_44_1","doi-asserted-by":"crossref","unstructured":"Pham C. S. andC.Doucouliagos.2017.\u201cAn Injury to One Is an Injury to All: Terrorism's Spillover Effects on Bilateral Trade.\u201d(IZA Discussion Papers 10859).","DOI":"10.2139\/ssrn.2998968"},{"issue":"3","key":"e_1_2_9_45_1","doi-asserted-by":"crossref","first-page":"673","DOI":"10.1257\/jel.49.3.673","article-title":"Can Government Purchases Stimulate the Economy?","volume":"49","author":"Ramey V.","year":"2011","journal-title":"Journal of Economic Literature"},{"issue":"7","key":"e_1_2_9_46_1","doi-asserted-by":"crossref","first-page":"676","DOI":"10.1080\/13504851.2022.2142502","article-title":"Testing Fiscal Sustainability in OECD Countries: New Evidence From the Past Centuries","volume":"31","author":"Saadaoui J.","year":"2024","journal-title":"Applied Economics Letters"},{"key":"e_1_2_9_47_1","unstructured":"Schlicht E.2003.\u201cEstimating Time\u2010Varying Coefficients With the VC Program.\u201d(Munich Discussion Paper 2003\u20138)."},{"issue":"4","key":"e_1_2_9_48_1","doi-asserted-by":"crossref","first-page":"1164","DOI":"10.1007\/s42952-021-00110-y","article-title":"VC: A Method for Estimating Time\u2010Varying Coefficients in Linear Models","volume":"50","author":"Schlicht E.","year":"2021","journal-title":"Journal of the Korean Statistical Society"},{"key":"e_1_2_9_49_1","doi-asserted-by":"crossref","DOI":"10.1016\/j.frl.2022.103420","article-title":"Can Geopolitical Risks Excite Germany Economic Policy Uncertainty: Rethinking in the Context of the Russia\u2010Ukraine Conflict","volume":"51","author":"Shen L.","year":"2023","journal-title":"Finance Research Letters"}],"container-title":["Scottish Journal of Political Economy"],"original-title":[],"language":"en","link":[{"URL":"https:\/\/onlinelibrary.wiley.com\/doi\/pdf\/10.1111\/sjpe.70059","content-type":"application\/pdf","content-version":"vor","intended-application":"text-mining"},{"URL":"https:\/\/onlinelibrary.wiley.com\/doi\/full-xml\/10.1111\/sjpe.70059","content-type":"application\/xml","content-version":"vor","intended-application":"text-mining"},{"URL":"https:\/\/onlinelibrary.wiley.com\/doi\/pdf\/10.1111\/sjpe.70059","content-type":"unspecified","content-version":"vor","intended-application":"similarity-checking"}],"deposited":{"date-parts":[[2026,4,9]],"date-time":"2026-04-09T07:55:39Z","timestamp":1775721339000},"score":1,"resource":{"primary":{"URL":"https:\/\/onlinelibrary.wiley.com\/doi\/10.1111\/sjpe.70059"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2026,4,9]]},"references-count":48,"alternative-id":["10.1111\/sjpe.70059"],"URL":"https:\/\/doi.org\/10.1111\/sjpe.70059","archive":["Portico"],"relation":{},"ISSN":["0036-9292","1467-9485"],"issn-type":[{"value":"0036-9292","type":"print"},{"value":"1467-9485","type":"electronic"}],"subject":[],"published":{"date-parts":[[2026,4,9]]},"assertion":[{"value":"2025-02-16","order":0,"name":"received","label":"Received","group":{"name":"publication_history","label":"Publication History"}},{"value":"2026-03-25","order":2,"name":"accepted","label":"Accepted","group":{"name":"publication_history","label":"Publication History"}},{"value":"2026-04-09","order":3,"name":"published","label":"Published","group":{"name":"publication_history","label":"Publication History"}}],"article-number":"e70059"}}