Research on risk connectedness among international energy markets, china's macroeconomy, and stock markets: Perspectives from the Russia-Ukraine conflict and the Israel-Palestine conflict

Based on the Quantile Vector Autoregression (QVAR) method and integrating a geopolitical conflict perspective, this study investigates the risk connectedness among the international energy markets, China's macroeconomy and stock market. The research reveals several key findings. Firstly, the Russia-Ukraine conflict significantly increases risk interconnections among the macroeconomy, stock market, and international energy markets under various conditions. Conversely, the Israel-Palestine conflict does not lead to a significant rise in risk interconnections but exacerbates incremental risk overflows in global energy markets and the Chinese stock market during extreme states. Secondly, geopolitical conflicts intensify risk inflows in currency values and resident employment during extreme conditions. Although these effects are not persistent, they underscore the importance of monitoring impacts from extreme events. Thirdly, risk transmission among the international energy markets, China's macroeconomy exhibits asymmetry across different market states, primarily through short-term expectation mechanisms. Lastly, the coordinated efforts of monetary and fiscal policies are effective in boosting demand, maintaining supply stability, and promoting smooth economic development.