Effects of geopolitical fragmentation and uncertainty on Liechtenstein’s economy

Department(s):

Research Area(s):

Hauptverantwortliche Person(en):

Dr. Andreas Brunhart, PD Dr. Martin Geiger

Liechtenstein’s economy enjoys a high level of prosperity, is resilient, and exceptionally productive. At the same time, due to its openness, specialization in investment goods exports, and strong financial sector, it is highly sensitive to global economic fluctuations and reacts more quickly and strongly than larger comparable countries. The current geopolitical fragmentation (e.g., US tariffs) and economic policy uncertainty accentuate this sensitivity. In this research project, time series analysis methods (local projection models) are used to estimate the effects of both geopolitical fragmentation – i.e., the development of global trade cooperation or barriers – and economic uncertainty on Liechtenstein’s real quarterly GDP and evaluate them in an international comparison.

The research project is carried out as part of the «Focus Topic» module of «Applied Economic Analysis». Initial analyses were presented in the Financial Stability Report 2025, and a LI Focus is currently being prepared.

Project duration: 2025–2026