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Does Crime Affect Economic Growth?

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  • Claudio Detotto
  • Edoardo Otranto

Abstract

Criminal activity acts like a tax on the entire economy: it discourages domestic and foreign direct investments, it reduces firms' competitiveness, and reallocates resources creating uncertainty and inefficiency. Although the impact of economic variables on crime has been widely investigated, there is not much concern about crime also affecting the overall economic performance. This work aims to bridge this gap by presenting an empirical analysis of the macroeconomic consequences of criminal activity. Italy is the case study for the time span 1979-2002. Dealing with a state space framework, a time varying parameter approach is employed to measure the impact of criminality on real Gross Domestic Product along time, and to measure the asymmetric impact in recession and expansion periods. The analysis is completed evaluating the effects of crime fluctuations in the long period by an impulse response analysis. Copyright � 2010 Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Kyklos.

Volume (Year): 63 (2010)
Issue (Month): 3 (08)
Pages: 330-345

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Handle: RePEc:bla:kyklos:v:63:y:2010:i:3:p:330-345

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Cited by:
  1. OA. Carboni & C. Detotto, 2013. "The economic consequences of crime in Italy," Working Paper CRENoS 201303, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  2. Claudio Detotto & Manuela Pulina, 2013. "Does more crime mean fewer jobs and less economic growth?," European Journal of Law and Economics, Springer, vol. 36(1), pages 183-207, August.
  3. B. Biagi & MG. Brandano & C. Detotto, 2012. "The effect of tourism on crime in Italy: a dynamic panel approach," Working Paper CRENoS 201201, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  4. Kyriakos C. Neanidis & Vea Papadopoulou, 2012. "Crime, Fertility, and Economic Growth: Theory and Evidence," Centre for Growth and Business Cycle Research Discussion Paper Series 163, Economics, The Univeristy of Manchester.
  5. Enamorado, Ted & Lopez-Calva, Luis F. & Rodriguez-Castelan, Carlos, 2013. "Crime and growth convergence : evidence from Mexico," Policy Research Working Paper Series 6730, The World Bank.
  6. repec:tir:wpaper:50 is not listed on IDEAS
  7. Rud, I & Van Klaveren, C. & Groot, W. and Maassen van den Brink, H., 2013. "Education and Youth Crime: a Review of the Empirical Literature," Working Papers 48, Top Institute for Evidence Based Education Research.
  8. Rosetta Lombardo & Marianna Falcone, 2011. "Crime And Economic Performance. A Cluster Analysis Of Panel Data On Italy'S Nuts 3 Regions," Working Papers 201112, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).
  9. Capuano, Carlo & Purificato, Francesco, 2012. "The macroeconomic impact of organized crime: a neo-Kaleckian perspective," MPRA Paper 40077, University Library of Munich, Germany.
  10. Kumar, Surender, 2013. "Crime and Economic Growth: Evidence from India," MPRA Paper 48794, University Library of Munich, Germany.

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