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Economic growth and crime: Is there an asymmetric relationship?

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  • Goulas, Eleftherios
  • Zervoyianni, Athina

Abstract

We examine the relationship between crime and per-capita output growth in a panel of 26 countries for 1995–2009, focusing on the various channels through which crime can constrain growth and exploring the extent to which these channels are influenced by economic conditions. A simple structural growth model serves as a guide for the empirical specification and a reference point for the interpretation of the empirical results. Our estimates suggest significant potential gains from reducing crime during periods of worsening economic conditions, when market sentiment is pessimistic, and thus uncertainty regarding the return to saving is above average, employment is low, and the strain on government-sector resources through high public-safety spending is already sizable. Crime does not seem to be so harmful to growth when economic conditions are sufficiently satisfactory. In this respect, our results provide an explanation for the inconclusive empirical evidence, based on reduced-form models, regarding the strength of the growth–crime relationship.

Suggested Citation

  • Goulas, Eleftherios & Zervoyianni, Athina, 2015. "Economic growth and crime: Is there an asymmetric relationship?," Economic Modelling, Elsevier, vol. 49(C), pages 286-295.
  • Handle: RePEc:eee:ecmode:v:49:y:2015:i:c:p:286-295
    DOI: 10.1016/j.econmod.2015.04.014
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    Cited by:

    1. Ioannis Laliotis, 2016. "Crime and unemployment in Greece: Evidence before and during the crisis," Economics and Business Letters, Oviedo University Press, vol. 5(1), pages 10-16.
    2. Cheng, Zhiming & Smyth, Russell, 2015. "Crime victimization, neighborhood safety and happiness in China," Economic Modelling, Elsevier, vol. 51(C), pages 424-435.
    3. King Yoong Lim & Pengfei Jia & Ali Raza, 2018. "Crime, Human Capital, and the Impact of Different Taxation," Working Papers 220851234, Lancaster University Management School, Economics Department.
    4. repec:eee:ecmode:v:68:y:2018:i:c:p:514-528 is not listed on IDEAS
    5. repec:bla:coecpo:v:37:y:2019:i:1:p:68-85 is not listed on IDEAS

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    Keywords

    Economic growth; Crime;

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