Geopolitical Fragmentation Index

The Geopolitical Fragmentation Index (GFI) captures the degree of global economic integration. A higher value signals rising fragmentation—countries drifting apart—while a lower value reflects deeper integration and growing interdependence.

GFI is constructed using a dynamic hierarchical factor model that treats fragmentation as a set of latent variables. Sixteen indicators serve as noisy proxies for these latent factors. We group the indicators into four categories: (1) trade—trade openness, trade restrictions, temporary trade barriers, trade policy uncertainty, tariffs; (2) finance—FDI ratio, financial flow ratio, capital control measures; (3) mobility—migration flow ratio, patent flows, migration fear index; and (4) political—geopolitical risk index, energy uncertainty, number of conflicts, number of sanctions, and the UN General Assembly kappa score.

We treat each indicator as an imperfect signal subject to idiosyncratic noise, and use a likelihood-based approach to estimate unobserved indexes that reflect the underlying dynamics of interest. The model captures both group-specific dynamics and common dynamics, yielding an operational and interpretable measure of geopolitical fragmentation. For methodological details, refer to our paper below.

GFI is freely available for download (1975:Q1–2024:Q1). If you use the index in your work, please cite the following paper.

Are We Fragmented Yet? Measuring Geopolitical Fragmentation and Its Causal Effect, 2024, Jesús Fernández-Villaverde, Tomohide Mineyama, Dongho Song

This figure shows the common component of GFI, summarizing shared dynamics across all four fragmentation dimensions.

These four plots display the group-specific components of GFI, capturing dynamics unique to trade, finance, mobility, and political indicators.