Project title

The World Economy’s Shifting Winds: Geopolitical Shocks and Challenges

Research question

Given the fast-shifting geoeconomic and geopolitical landscape, the research projects focus on key aspects of this economic transformation and the far-reaching geopolitical “Zeitenwende”.

Project description

At NIAS, Michael Funke will study the economic and political implications of recent geopolitical shocks, including the war in Ukraine and the intensifying US–China trade conflict, which have propelled geopolitical risk to the top of policy agendas worldwide. Motivated by the rapidly shifting global economic landscape, his research projects focus on key aspects of economic transformation and the far-reaching geopolitical Zeitenwende.

Funke’s research examines how geopolitical developments and risks affect global economies. Core topics include economic dependence and interdependence, the economics of sanctions, globalisation and fragmentation, and the economic aspects of conflict and cooperation.

At the same time, his work addresses broader political developments accompanying these transformations. The number of liberal democracies worldwide has gradually declined, while autocratic regimes have increased. Notably, the heightened risk of post–Cold War democratic backsliding has not been driven by sudden regime breakdowns through coups d’état, but by the gradual erosion of liberal democracies. From within, liberal democracies are increasingly challenged by those who see themselves as their victims. From without, they face pressures posed most potently by China and Russia. In this interplay, a noticeable wave of autocratisation has emerged.

Selected publications

  • Blagov, B., Dirks, M. and M. Funke (2025) “Economic Knock-On Effects of Russia’s Geopolitical Risk on Advanced Economies: A Bayesian Global VAR Approach”, Macroeconomic Dynamics 29, e153.
  • Funke, M. and H. Tasane (2025) “Regional Economic Impacts of the Øresund Cross-Border Fixed Link: Cui Bono?”, Regional Studies (https://doi.org/10.1080/00343404.2025.2573115).
  • Funke, M. and R. Terasa (2025) “Will Temporary Super Depreciation Allowances for Green and Digital Investments Have Knock-on Effects?”, Journal of Policy Modeling 47, 977-998.
  • Funke, M., Ho, T. and A. Tsang (2025) “Re-Examining Democratization’s Impact on Foreign Borrowing Costs during the First Era of Globalization”, Financial History Review 31, 330-346.
  • Funke, M. and D. Zhong (2024) “The Political Globalization Trilemma Revisited: An Empirical Assessment Across Countries and Over Time”, Economics & Politics 36, 177-201.
  • Funke, M., Ho, T. and A. Tsang (2023) “Containment Measures during the COVID Pandemic: The Role of Non-Pharmaceutical Health Policies”, Journal of Policy Modeling 45, 90-102.
  • Funke, M. and A. Wende (2023) “The US–China Phase One Trade Deal: An Economic Analysis of the Managed Trade Agreement”, The Canadian Journal of Economics 56, 758-786.