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Cycles in Crime and Economy: Leading, Lagging and Coincident Behaviors

Author

Listed:
  • C. Detotto

  • E. Otranto

Abstract

In the last decades, the interest in the relationship between crime and business cycle has widely increased. It is a diffused opinion that a causal relationship goes from economic variables to criminal activities. This work aims to verify this proposition by using the dynamic factor model to analyze the common cyclical components of Gross Domestic Product (GDP) and a large set of criminal types. Italy is the case study for the time span 1991 - 1 - 2004 - 12. The purpose is twofold - on the one hand we verify if such a relationship does exist; on the other hand we select what crime types are related to the business cycle and if they are leading, coincident or lagging. The study finds that most of the crime types show a counter-cyclical behavior with respect to the overall economic performance, but only a few of them have an evident relationship with the business cycle. Furthermore, some crime offenses, such as bankruptcy, embezzlement and fraudulent insolvency, seem to anticipate business cycle, in line with recent global events.

Suggested Citation

  • C. Detotto & E. Otranto, 2010. "Cycles in Crime and Economy: Leading, Lagging and Coincident Behaviors," Working Paper CRENoS 201023, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    • Handle: RePEc:cns:cnscwp:201023
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    References listed on IDEAS

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    Cited by:

    1. Litany Eldest Nurbasuni & Khoirunurrofik Khoirunurrofik, 2024. "Between crime and economic growth: the asymmetric role of public expenditure and unemployment," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 44(1), pages 21-45, March.
    2. Marcus Box & Karl Gratzer & Xiang Lin, 2020. "Destructive entrepreneurship in the small business sector: bankruptcy fraud in Sweden, 1830–2010," Small Business Economics, Springer, vol. 54(2), pages 437-457, February.
    3. R Pickering & K Y Lim, 2024. "Does crime type matter in understanding the nexus between universal credit and crime? Evidence from England and Wales," Economic Issues Journal Articles, Economic Issues, vol. 29(1), pages 93-131, March.
    4. Pengfei Jia & King Yoong Lim, 2021. "The stabilization role of police spending in a neo‐Keynesian economy with credit market imperfections," Scottish Journal of Political Economy, Scottish Economic Society, vol. 68(1), pages 103-125, February.
    5. Marcus Box & Karl Gratzer & Xiang Lin, 2019. "The Asymmetric Effect of Bankruptcy Fraud in Sweden: A Long-Term Perspective," Journal of Quantitative Criminology, Springer, vol. 35(2), pages 287-312, June.
    6. Víctor Hugo Torres Preciado, 2017. "Desempleo y criminalidad en los estados de la frontera norte de México: un enfoque espacial bayesiano de vectores auto-regresivos. (Unemployment and crime in the Northern-border states of Mexico: a spatial-Bayesian autoregressive vector approach)," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 25-58, May.
    7. Beqiraj, Elton & Fedeli, Silvia & Giuriato, Luisa, 2025. "Shadow economy or economic driver? The impact of counterfeiting on Italy's growth," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 1275-1291.
    8. 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.
    9. Cerro, Ana Maria & Michel Rivero, Andrés, 2012. "Business cycles and crime. the case of Argentina," MPRA Paper 44515, University Library of Munich, Germany.
    10. Oliviero A. Carboni & Claudio Detotto, 2016. "The economic consequences of crime in Italy," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 43(1), pages 122-140, January.
    11. Pengfei Jia & King Yoong Lim & Ali Raza, 2020. "Crime, different taxation, police spending and embodied human capital," Manchester School, University of Manchester, vol. 88(5), pages 664-698, September.

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    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • K0 - Law and Economics - - General

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