NCJ Number
188672
Journal
Journal of Financial Crime Volume: 8 Issue: 2 Dated: November 2000 Pages: 103-112
Date Published
November 2000
Length
10 pages
Annotation
This paper presents a macroeconomic framework for the analysis of the relationships between the illegal sector, money laundering, and the legal economy from a human as well as a financial perspective.
Abstract
The discussion highlights the role of money laundering as a polluting multiplier of the weight of illegal activity by the legal activity in a given economy and also analyzes the macro-financial side of those phenomena. The analysis uses a classical income-expenditure model to examine the effects induced by criminal economic activities on an economy characterized by the presence of both legal and illegal sectors. The model separates the legal and illegal sectors to demonstrate the conditions under which a possible synergy can exist between general crime policies and regulation of money laundering as general policies, bestowing a beneficial effect on legal income if regulations on money laundering are effective. The analysis also demonstrates the tradeoff in terms of public policies between the quantitative growth of national wealth and safeguarding the law. Figures, list of 7 further readings, and 1 reference