Oil Price Shocks and Protest: Can Shadow Economy Mitigate?
Phoebe W. Ishak () and
Ulrich Fritsche ()
No 201901, Macroeconomics and Finance Series from University of Hamburg, Department of Socioeconomics
In this paper, we study the impact of oil price shocks on the incidence of protest over the period 1991-2015. Our results indicate that negative oil price shocks are followed by an uptick in the number of protests and that a higher initial size of the shadow economy allows to mitigate the negative consequences of low oil prices on the likelihood of protest. To explain these results, we show that negative oil price shocks lead to a significant increase in the size of the shadow economy in highly oil dependent countries and that this countercyclical behavior is largely due to oil-price-driven income shocks. In our estimations, a decrease in the GDP per capita by one percentage point increases the shadow economy by 0.54 percentage points. This suggest that the shadow economy’s capacity to absorb persistent oil price fluctuations without provoking political unrest, should regard it as a mitigation tool rather than an economic burden.
Keywords: Oil Price Shocks; Protest; Shadow Economy; Income (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-iue
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://www.wiso.uni-hamburg.de/repec/hepdoc/macppr_1_2019.pdf First version, 2019 (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hep:macppr:201901
Access Statistics for this paper
More papers in Macroeconomics and Finance Series from University of Hamburg, Department of Socioeconomics Contact information at EDIRC.
Bibliographic data for series maintained by Ulrich Fritsche ().