{ "title": "The Macroeconomic Impact of Social Unrest", "publication": "IMF Working Papers, May 7, 2021", "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2021/05/07/the-macroeconomic-impact-of-social-unrest-50338", "canonical": "https://www.imf.org/en/publications/wp/issues/2021/05/07/the-macroeconomic-impact-of-social-unrest-50338", "overlayPath": "/en/publications/wp/issues/2021/05/07/the-macroeconomic-impact-of-social-unrest-50338/index.md", "summary": "This paper explores the macroeconomic impact of social unrest, using a novel index based on news reports. The findings are threefold. First, unrest has an adverse effect on economic activity, with GDP remaining on average 0.", "sections": [ { "heading": "Summary of scope and approach", "content": "- Explores the macroeconomic impact of social unrest using a novel index based on news reports.\n- Identifies effects on GDP, sectoral activity, demand components, confidence, uncertainty, and heterogeneity by event type and country characteristics." }, { "heading": "Main findings", "content": "- First key finding:\n - GDP remains on average 0.2 percentage points below the pre-shock baseline six quarters after a one-standard deviation increase in the unrest index.\n - The decline is driven by sharp contractions in manufacturing and services (sectoral dimension), and consumption (demand dimension).\n- Second key finding:\n - Unrest lowers confidence and raises uncertainty.\n - The adverse effect on GDP can be mitigated by strong institutions and by a country’s policy space.\n- Third key finding:\n - An unrest “event”, captured by a large change in the unrest index, is associated with a 1 percentage point reduction in GDP six quarters after the event.\n - Impacts differ by type of event:\n - Episodes motivated by socio-economic reasons result in sharper GDP contractions compared to those associated with politics/elections.\n - Events triggered by a combination of socio-economic and political/election factors lead to the sharpest contractions." }, { "heading": "Channels and heterogeneity", "content": "- Sectoral dimension:\n - Manufacturing and services experience sharp contractions following unrest shocks.\n- Demand dimension:\n - Consumption is a principal channel through which unrest reduces GDP.\n- Confidence and uncertainty:\n - Unrest episodes lower confidence and raise uncertainty, amplifying macroeconomic effects.\n- Mitigating factors:\n - Strong institutions and greater policy space are associated with smaller adverse GDP effects from unrest.\n- Event types:\n - Socio-economic-motivated episodes → sharper GDP contractions.\n - Politics/elections-motivated episodes → less sharp contractions.\n - Combined-motivation episodes → sharpest contractions." }, { "heading": "Robustness and identification", "content": "- Results are not driven by countries with adverse growth trajectories prior to unrest events.\n- Results are not driven by fiscal consolidations.\n- Findings are robust to instrumenting via regional unrest." }, { "heading": "Key statistics and publication identifiers", "content": "- GDP impact after a one-standard deviation increase in the unrest index: 0.2 percentage points below pre-shock baseline six quarters after the shock.\n- GDP impact after a large unrest event: 1 percentage point reduction six quarters after the event.\n- Pages: 31\n- Volume: 2021\n- Issue: 135\n- Series: Working Paper No. 2021/135\n- DOI: https://doi.org/10.5089/9781513582573.001\n- Stock No: WPIEA2021135\n- ISBN: 9781513582573\n- ISSN: 1018-5941\n\nSource: The Macroeconomic Impact of Social Unrest, Metodij Hadzi-Vaskov, Samuel Pienknagura, and Luca A Ricci, IMF Working Papers 2021, 135 (2021).\n\n---\n\n Content in this bundle\n\n- Working Paper\n - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2021/05/07/the-macroeconomic-impact-of-social-unrest-50338" } ], "bullets": [ "[Markdown version](/en/publications/wp/issues/2021/05/07/the-macroeconomic-impact-of-social-unrest-50338/index.md)", "[Structured JSON version](/en/publications/wp/issues/2021/05/07/the-macroeconomic-impact-of-social-unrest-50338/index.json)", "[Bundle manifest](/en/publications/wp/issues/2021/05/07/the-macroeconomic-impact-of-social-unrest-50338/bundle-manifest.json)", "Authors: Metodij Hadzi-Vaskov, Samuel Pienknagura, Luca A Ricci", "Published: May 7, 2021", "Series: IMF Working Papers", "DOI: https://doi.org/10.5089/9781513582573.001", "Explores the macroeconomic impact of social unrest using a novel index based on news reports.", "Identifies effects on GDP, sectoral activity, demand components, confidence, uncertainty, and heterogeneity by event type and country characteristics.", "First key finding:", "Second key finding:", "Third key finding:", "Sectoral dimension:", "Demand dimension:", "Confidence and uncertainty:", "Mitigating factors:", "Event types:", "Results are not driven by countries with adverse growth trajectories prior to unrest events.", "Results are not driven by fiscal consolidations.", "Findings are robust to instrumenting via regional unrest.", "GDP impact after a one-standard deviation increase in the unrest index: 0.2 percentage points below pre-shock baseline six quarters after the shock.", "GDP impact after a large unrest event: 1 percentage point reduction six quarters after the event.", "Pages: 31", "Volume: 2021", "Issue: 135", "Series: Working Paper No. 2021/135", "DOI: https://doi.org/10.5089/9781513582573.001", "Stock No: WPIEA2021135", "ISBN: 9781513582573", "ISSN: 1018-5941", "**Working Paper**" ], "related": [ { "title": "Working Paper", "role": "paper", "sourceUrl": "https://www.imf.org/-/media/files/publications/wp/2021/english/wpiea2021135-print-pdf.pdf", "summary": { "path": "/-/media/files/publications/wp/2021/english/wpiea2021135-print-pdf.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/wp/2021/english/wpiea2021135-print-pdf.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/publications/wp/issues/2021/05/07/the-macroeconomic-impact-of-social-unrest-50338/index.md", "json": "/en/publications/wp/issues/2021/05/07/the-macroeconomic-impact-of-social-unrest-50338/index.json", "bundleManifest": "/en/publications/wp/issues/2021/05/07/the-macroeconomic-impact-of-social-unrest-50338/bundle-manifest.json" }, "generatedAtUtc": "2026-09-16T19:34:10.243Z" }