Modelling the dynamic interactions among crime, deterrence and socio-economic variables: evidence from a vector error-correction model

This paper uses recent advances in time series econometrics to examine the dynamic interactions among crime, a deterrent varibale and three other socio-economic variables at a macro level for Australia between 1963-1991. We exploit the idea of long-run relationships and error-correcting equilibrium in developing a vector-error correction model that incorporates these variables and identifies its short-run deviations over time while preserving the long-run information that co-exists between them.