Cycles In Crime And Economy: Leading, Lagging And Coincident Behaviors
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 paper 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 the authors verify if such a relationship does exist; on the other hand they select what crime types are related to the business cycle and if they are leading, coincident or lagging.