Information markets and prediction of political events: Does the stock market speak?

Benjamin Eschenburg, Audrey Ann Faber & Niklas Harder

This project is examining the possibility to predict civil unrest and uprising through changes in the stock market. The stock market should be useable for this prediction since the main resource traded at stock exchanges is information on future events and developments. Specifically we will look at the Arab Spring, and if the stock market was able to predict the demonstrations, violence and uprising in several Northern African countries in 2011. Our interest is not only to predict instability but also to predict relative stability in other countries in the region.