The Effects of the Political Turbulences on the Stock Exchange Indices

Abstract Political turbulence is known to influence the velocity of economic development and reduce investments. Our paper aims point up linkage between political instability evolution Romanian capital market. We model volatility two Bucharest Stock Exchange indices BET BET-NG using a GARCH/ARCH approach for daily data 2010 2021. Results highlight interconnections policy uncertainty financial In both cases, BET-NG, our study shows that different types events have levels on indices’ volatility. Unexpected “shock” type with negative impacts resulted in much higher than positive events. When there were had fiscal connotations, they greater power penetration investment environment because it comes down figures calculations direct, measurable impact. There need involvement, certainty, lack ambiguity, predictability, from legislative view how applied.