AbstractThe COVID-19 pandemic entails a medium- and long-run risk of heightened political conflict. In this short essay we distinguish four major consequences of COVID-19 that may fuel social tensions and political violence, namely i) spiking poverty, ii) education under stress, iii) potential for repression, and iv) reduced inter-dependence. After discussing them in turn, we will formulate policy recommendations on how to attenuate these risks.
A Two-Step Indirect Inference Approach to Estimate the Long-Run Risk Asset Pricing Model