Notes on Constructing the Audit These notes
Author : danika-pritchard | Published Date : 2025-07-16
Description: Notes on Constructing the Audit These notes describe details about the audit in the paper Measuring Geopolitical Risk by Dario Caldara and Matteo Iacoviello Construction of the Index Each month the universe of newspapers that we use to
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Transcript:Notes on Constructing the Audit These notes:
Notes on Constructing the Audit These notes describe details about the audit in the paper “Measuring Geopolitical Risk” by Dario Caldara and Matteo Iacoviello Construction of the Index Each month the universe of newspapers that we use to construct our GPR index contains about [70,000] articles. This is set U. Of these, only about [0.32%] meets our computer-generated criterion to be included in the GPR index. This is set G. Each month, The ratio G/U (normalized to equal 100 in the 2000-2009 decade) is our computer-generated GPR index. Design of the audit sample – Benchmark GPR Index SAMPLING FROM GPR ARTICLES (set G) We sample a subset of the articles that are identified as discussing high or rising geopolitical risks. We code these articles as GPR=1, GPR=0, GPR=-1, as follows: 1 = the article contains references to high or rising geopolitical risks. 0 = the article contains no references to geopolitical risks, or is uninformative whether geopolitical risks are rising or falling. -1 = the article contains references to low or declining geopolitical risks. Design of the audit sample – Expanded Sample Sampling from GPRE ARTICLES (set E) We sample from the universe of newspapers a subset of articles which is sufficiently large to include articles that are likely to be GPR=1 articles. This is set E, and contains about [ 15% ] of the articles in sample U. The ratio E/U is the GPRE index. The subset is constructed sampling articles that contain any of these 4 words (roots): military OR war OR geopolitical OR terroris*. We code these articles as GPR=1 or GPR=0, as follows: 1 = the article contains references to high or rising geopolitical risks. 0 = the article contains no references to geopolitical risks. Reading the Articles We select a sample of 50 out of [384] months. For each of the selected months, working with a team of RAs, we extract [50] random articles from set G, and [50] random articles from set E. To ensure randomness, we pick the first [50] articles in the given sets (G and E) that also contain the generic stopwords “a” and “the” and “and” (http://www.ranks.nl/stopwords) We exclude the Financial Times from the searches since no full text can be saved for replicability purposes. How to Code Articles General Principle If the article discusses or highlights recent past, or current or future expected geopolitical risks, terror risks, war risks,
