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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
    as

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    File URL: http://crenos.unica.it/crenos/node/2990
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    References listed on IDEAS

    as
    1. Domenico Delli Gatti & Mauro Gallegati & Bruce Greenwald & Alberto Russo & Joseph Stiglitz, 2009. "Business fluctuations and bankruptcy avalanches in an evolving network economy," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 4(2), pages 195-212, November.
    2. Denis Fougère & Francis Kramarz & Julien Pouget, 2009. "Youth Unemployment and Crime in France," Journal of the European Economic Association, MIT Press, vol. 7(5), pages 909-938, September.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Oliviero A. Carboni & Claudio Detotto, 2016. "The economic consequences of crime in Italy," Journal of Economic Studies, Emerald Group Publishing, vol. 43(1), pages 122-140, January.
    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. repec:ere:journl:v:xxxvi:y:2017:i:1:p:25-58 is not listed on IDEAS
    4. Cerro, Ana Maria & Michel Rivero, Andrés, 2012. "Business cycles and crime. the case of Argentina," MPRA Paper 44515, University Library of Munich, Germany.

    More about this item

    Keywords

    business cycle; crime; common factors; dynamic factor models;

    JEL classification:

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

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