Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/260455 
Year of Publication: 
2020
Series/Report no.: 
WiSo-HH Working Paper Series No. 52
Publisher: 
Universität Hamburg, Fakultät für Wirtschafts- und Sozialwissenschaften, WiSo-Forschungslabor, Hamburg
Abstract: 
In this paper, we study the impact of exogenous variations of international oil prices on the incidence of protest, while exploring the role of the shadow economy as a mitigating factor. We find that oil price shocks are negatively associated with protests, but the effect is less severe the higher the initial size of the shadow economy. To explain these results, we show that the size of the shadow economy responds counter-cyclically to oil-price-driven income shocks. In particular, we find that the decline in the GDP per capita growth following a negative oil price shock leads to an increase in the size of the shadow economy. 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.
Subjects: 
Oil Price Shocks
Protest
Shadow Economy
Income
JEL: 
D74
O13
O17
Q34
Document Type: 
Working Paper

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