Personal Indebtedness, Spatial Effects and Crime

There is a long and detailed history of attempts to understand what causes crime. One of the most prominent strands of this literature has sought to better understand the relationship between economic conditions and crime. Following Becker (1968), the economic argument is that in an attempt to maintain consumption in the face of unemployment, people may resort to sources of illicit income. In a similar manner, we might expect ex–ante, that increases in the level of personal indebtedness would be likely to provide similar incentives to engage in criminality. In this paper we seek to understand the spatial pattern of property and theft crimes using a range of socioeconomic variables, including data on the level of personal indebtedness.

Personal Indebtedness, Spatial Effects and Crime

There is a long and detailed history of attempts to understand what causes crime. One of the most prominent strands of this literature has sought to better understand the relationship between economic conditions and crime. Following Becker (1968), the economic argument is that in an attempt to maintain consumption in the face of unemployment, people may resort to sources of illicit income. In a similar manner, we might expect ex–ante, that increases in the level of personal indebtedness would be likely to provide similar incentives to engage in criminality. In this paper we seek to understand the spatial pattern of property and theft crimes using a range of socioeconomic variables, including data on the level of personal indebtedness.

Rational Expectations Dynamics: A Methodological Critique

This paper analyses RE macromodels from the methodological perspective. It proposes a particular property, robustness, which should be considered a necessary feature of scienti cally valid models in economics, but which is absent from many RE macromodels. To restore this property many macroeconomists resort to detailed and implausible assumptions, which take their models a long way from simple Rational Expectations. The paper draws attention to the problems inherent in the technique of local linearisation and concludes by proposing the use of nonlinear models, analysed globally.