Ukraine destroyed biz con – energy prices
White et al, 5-9-2022, Olivia White is a senior partner in McKinsey’s Bay Area office, Kevin Buehler is a senior partner in the New York office, Sven Smit is a senior partner in the Amsterdam office, Ezra Greenberg is a partner in the Stamford office, Mihir Mysore is a partner in the Houston office, Ritesh Jain is an associate partner in the New York office, Martin Hirt is a senior partner in the Greater China office, Arvind Govindarajan is a partner in the Boston office, and Eric Chewning is a partner in the Washington, DC, office. "War in Ukraine: Twelve disruptions changing the world," https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/war-in-ukraine-twelve-disruptions-changing-the-world, LMS
The war has increased economic volatility. The US volatility index (VIX) and the economic policy uncertainty (EPU) index have both risen, though not nearly as much as in March 2020, at the onset of the COVID-19 pandemic. This is in line with earlier research findings that economic volatility is surprisingly low during war and periods of conflict, likely because a rise in government spending makes a slice of corporate profits easier to predict. Over time, this war may prove to be different, however, because of its effects on energy; volatility in energy sources and prices can produce dramatic effects throughout the global economy. On another measure, according to a of , the war has introduced considerable volatility in the risks that business leaders see to economic growth. In our March 2022 poll, geopolitical risk displaced the pandemic and inflation as the biggest threat to growth.