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Testing the effects of crime on the Italian economy

By Claudio Detotto and 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

Topics: SECS-P/03 Scienza delle finanze, SECS-P/01 Economia politica
Publisher: Economics Bulletin
Year: 2010
OAI identifier: oai:eprints.uniss.it:6933
Provided by: UnissResearch
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