Economic growth, income inequality and lethal violence in developed countries

Purpose The paper aims to investigate the effect of GDP growth on crime and to test the hypothesis of nonlinearity. Additionally, we estimate the interaction between GDP and income inequality and examine its impact on the relationship between GDP and homicide rates. Design/methodology/approach The study utilizes panel data from the Organization for Economic Cooperation and Development (OECD), spanning the period from 2000 to 2018 and estimates dynamic panel GMM models. Findings We found a nonlinear relationship between GDP and homicide rates, indicating a dual effect of GDP on the occurrence of lethal crimes. Moreover, income inequality conditions the effect of GDP on homicide rates, exerting a significant influence. We conclude that in contexts characterized by high levels of income inequality, GDP growth is more effective in reducing crime, as there is greater potential for improvement. Originality/value This paper contributes to the existing literature by providing insights into the complex nonlinearity between economic conditions, income inequality and homicide rates.