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

Author

Listed:
  • Claudio Detotto

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

  • Edoardo Otranto

    (University of Messina)

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.
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Suggested Citation

  • Claudio Detotto & Edoardo Otranto, 2012. "Cycles in Crime and Economy: Leading, Lagging and Coincident Behaviors," Post-Print hal-01972851, HAL.
    • Handle: RePEc:hal:journl:hal-01972851
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    References listed on IDEAS

    as
    1. 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.
    2. 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.
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    Cited by:

    1. 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.
    2. 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.
    3. 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.
    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. 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 sp," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 25-58, May.
    6. 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.
    7. Cerro, Ana Maria & Michel Rivero, Andrés, 2012. "Business cycles and crime. the case of Argentina," MPRA Paper 44515, University Library of Munich, Germany.
    8. 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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    More about this item

    JEL classification:

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

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