Russia gives less than she receives: Evidence from the cross-country causal network of financial stress

Economic Systems. 2025. P. 1–14.

Stolbov M., Щепелева М. А.

We investigate the time-varying role of Russia in the international causal network of financial stress. The network is derived using the factor-adjusted network estimation for high-dimensional time series (FNETS), which is applied to text-based financial stress indices for 66 countries. We run this technique for sequentially expanding time windows (ranging from 2000Q1:2013Q4 to 2000Q1:2023Q4). Based on centrality metrics, Russia is an important node in the international financial stress network. On average, the net balance of outgoing and incoming causal linkages is slightly negative, implying that Russia is a net receiver of financial stress. Nonetheless, this role of Russia in the network was reversed during the latest time windows encompassing the Russia–Ukraine conflict, as the number of outgoing linkages substantially increased. Despite pronounced geopolitical turbulences, the US and major European economies have the highest number of causal linkages with the Russian financial stress throughout the entire research period, while the density of linkages between the Russian financial stress and that of BRICS economies is strikingly limited.

Ключевые слова: Russia, financial stress, geopolitical risk, Causal network