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Testing the effects of crime on the Italian economy


  • Claudio Detotto

    () (Dipartimento Economia, Impresa e Regolamentazione (DEIR) and CRENoS, University of Sassari)

  • Pulina Manuela

    () (School of Economics and Management, Fac. of Economics, Free Univ. Bolzano; CRENoS, Univ. Sassari)


This paper aims at assessing the causal and temporal relationships between crime and the economic indicators related to the aggregated demand function. The case study is Italy and a quarterly frequency is used (1981:1-2005:4). A Vector Autoregressive Correction Mechanism (VECM) is employed after having assessed the integration and cointegration status of the variables under investigation. Long and short run dynamics are estimated. A Granger causality test is also implemented to establish temporal interrelationships. The main findings are that, in the short run, crime positively effects GDP and government expenditure, while has a crowding out effect on exports. In the long run, crime positively leads imports and inflation, whereas negatively investments and government expenditure.

Suggested Citation

  • Claudio Detotto & Pulina Manuela, 2010. "Testing the effects of crime on the Italian economy," Economics Bulletin, AccessEcon, vol. 30(3), pages 2063-2074.
  • Handle: RePEc:ebl:ecbull:eb-10-00465

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    References listed on IDEAS

    1. Al-Marhubi, Fahim A., 2000. "Corruption and inflation," Economics Letters, Elsevier, vol. 66(2), pages 199-202, February.
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    Cited by:

    1. Biagi, Bianca & Brandono, Maria Giovanna & Detotto, Claudio, 2012. "The effect of tourism on crime in Italy: A dynamic panel approach," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 6, pages 1-24.
    2. Diana L Carreon-Guzman & Jorge Garza-Rodriguez & David R Garza-Turrubiates & Ricardo A Gonzalez-Camargo & Eugenio Lozano-Castillo, 2015. "The effects of crime on the Mexican economy: a vector error correction model," Economics Bulletin, AccessEcon, vol. 35(2), pages 959-967.

    More about this item


    Crime; aggregated demand; short and long run dynamics; Granger causality;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • A1 - General Economics and Teaching - - General Economics


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