The Effects of Monetary and Fiscal Policies on Crime

Abstract

This paper investigates whether monetary and fiscal policies, such as lump-sum taxes, distortionary taxation and monetization of public deficit, have criminal impacts. We address this question extending the neoclassical monetary growth model. We have demonstrated that fiscal policies affect crime through government spending. Conversely, the effect of monetary policy, especially inflation, on crime depends on the separability of the utility function.