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Testing the effects of crime on the Italian economy

Author

Listed:
  • Claudio Detotto

    (LISA - Lieux, Identités, eSpaces, Activités - UPP - Université Pascal Paoli - CNRS - Centre National de la Recherche Scientifique)

  • Manuela Pulina

Abstract

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 & Manuela Pulina, 2010. "Testing the effects of crime on the Italian economy," Post-Print hal-01971129, HAL.
    • Handle: RePEc:hal:journl:hal-01971129
    as

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    References listed on IDEAS

    as
    1. Al-Marhubi, Fahim A., 2000. "Corruption and inflation," Economics Letters, Elsevier, vol. 66(2), pages 199-202, February.
    2. De Mello Joao M & Zilberman Eduardo, 2008. "Does Crime Affect Economic Decisions? An Empirical Investigation of Savings in a High-Crime Environment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-28, December.
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    Citations

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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 (2007-2020), Kiel Institute for the World Economy (IfW Kiel), 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.
    3. Tauã Vital & Daniel Morais De Souza & Jessica Faciroli, 2020. "Unemployment, poverty and police performance: an ARDL analysis of crime in São Paulo," Economics Bulletin, AccessEcon, vol. 40(1), pages 128-139.

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    More about this item

    Keywords

    crime; aggregated demand; short and long run dynamics; Granger causality;
    All these keywords.

    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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