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Research Handbook on Money Laundering

Research Handbook on Money Laundering

Elgar original reference

Edited by Brigitte Unger and Daan van der Linde

Although the practice of disguising the illicit origins of money dates back thousands of years, the concept of money laundering as a multidisciplinary topic with social, economic, political and regulatory implications has only gained prominence since the 1980s. This groundbreaking volume offers original, state-of-the-art research on the current money laundering debate and provides insightful predictions and recommendations for future developments in the field.

Chapter 4: Money laundering and its effects on crime: a macroeconomic approach

Donato Masciandaro

Subjects: economics and finance, economic crime and corruption, law - academic, corruption and economic crime, politics and public policy, terrorism and security


In recent times economic analysis has developed a peculiar focus on the financial issues related to the study of crime, thus far completely absent in the international literature. The basic theoretical reason lies in the absence of special treatment of monetary and financial aspects within the traditional Becker model. Furthermore, the complexity of the topic also concerns the need to adopt a multidisciplinary approach, using cognitive instruments associated with different disciplines: economic, legal and social sciences. In this chapter, I propose a simple macroeconomic approach to analyse the relationship between crime, money laundering and value. The paper builds extensively on different works of the author (see References), which provide considerable details that space precludes presenting here. The emphasis on the study of money laundering has progressively increased, recognizing its role in the development of any crime that generates revenues. In fact, the conduct of any illegal activity may be subject to a special category of transaction costs, linked to the fact that the use of the relative revenues increases the probability of discovery of the crime and therefore incrimination. Those transaction costs can be minimized through an effective laundering action, a means of concealment that separates financial flows from their origin, an activity whose peculiar economic function is to transform potential wealth into effective purchasing power.

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