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The Relationship between Economic Growth and Money Laundering – a Linear Regression Model


  • Ion Stancu

    (The Bucharest Academy of Economic Studies)

  • Daniel Rece

    (The Bucharest Academy of Economic Studies)


This study provides an overview of the relationship between economic growth and money laundering modeled by a least squares function. The report analyzes statistically data collected from USA, Russia, Romania and other eleven European countries, rendering a linear regression model. The study illustrates that 23.7% of the total variance in the regressand (level of money laundering) is “explained” by the linear regression model. In our opinion, this model will provide critical auxiliary judgment and decision support for anti-money laundering service systems.

Suggested Citation

  • Ion Stancu & Daniel Rece, 2009. "The Relationship between Economic Growth and Money Laundering – a Linear Regression Model," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 9(09(538)), pages 3-8, September.
  • Handle: RePEc:agr:journl:v:09(538):y:2009:i:09(538):p:3-8

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    References listed on IDEAS

    1. Chuhan, Punam & Perez-Quiros, Gabriel & Popper, Helen, 1996. "International capital flows : do short-term investment and direct investment differ?," Policy Research Working Paper Series 1669, The World Bank.
    2. Ghosh, Atish R & Ostry, Jonathan D, 1995. "The Current Account in Developing Countries: A Perspective from the Consumption-Smoothing Approach," World Bank Economic Review, World Bank Group, vol. 9(2), pages 305-333, May.
    3. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    4. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    5. Manuel Agosin & Roberto Machado, 2005. "Foreign Investment in Developing Countries: Does it Crowd in Domestic Investment?," Oxford Development Studies, Taylor & Francis Journals, vol. 33(2), pages 149-162.
    6. Fry, Maxwell J. & Claessens,Constantijn A. & Burridge, Peter & Blanchet, Marie-Christine, 1995. "Foreign direct investment, other capital flows, and current account deficits : what causes what?," Policy Research Working Paper Series 1527, The World Bank.
    7. Premachandra Athukorala & Jayant Menon, 1995. "Developing with Foreign Investment: Malaysia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 28(1), pages 9-22.
    8. Atish R. Ghosh & Jonathan David Ostry, 1993. "Do Capital Flows Reflect Economic Fundamentals in Developing Countries?," IMF Working Papers 93/34, International Monetary Fund.
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