Populism and Financial Markets: A Mixed Methods Analysis on Investors' Reactions and Political Risk Assessment (Studies in Finance and Accounting)

By: Claudio Schütz

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Synopsis: The political phenomenon of populism has emerged as a significant force in recent decades, with a profound impact on the economic landscape. This book examines the implications of populism for financial markets, identifying it as a key political risk factor. As populist movements gain ground on a global scale, understanding their influence on financial behavior is essential, not only to navigate the complex investment environment of the present but also to anticipate future developments. The central research question addressed in this book is to understand the impact of populism on investor expectations and political risk assessment in financial markets. The findings suggest that populism increases market uncertainty, raises the returns required by the investors, and thus increases the cost of equity for firms. Emphasizing the need to integrate populist risks into financial assessments, this book provides both theoretical insights and practical guidance for investors, financial managers, and policymakers. It highlights the importance of developing adaptive strategies to manage the evolving risks of populism in global financial markets.