An Empirical Study Of The Effects Of Money Laundering On Economic Growth

Money laundering is increasingly rampant in recent years, and the relevant criminal area expands unceasingly, so the dangers of money laundering are gradually concerned. Now scholars generally agree that money laundering will attract crime and corruption, and result in the loss of national reputation and so on. However, the economic effects of money laundering are controversial. It is believed that the destruction of financial institutions and the distortion of the allocation of resources will inhibit economic growth. So we should do more work in fighting against money laundering. However, there is a contrary view that money laundering may also have a positive effect on economic growth. This view is that if money is transferred from the countries?regions? with criminal activities to the laundering countries?regions?,the latter will not bear the negative effects of predicate crimes associated with money laundering. It is the case for countries?regions? with less strict anti-money laundering (AML)regulations than neighboring countries?regions?. Meanwhile, the stricter the AML regulations, the countries?regions? will suffer from more negative externality effects, namely the inability to attract illegal capital. In this way, the inaction policy is put forward. It means that the government should not devote resources to AML policies.In this context, it is necessary to study the impact of money laundering on economic growth. However, few literatures conduct research on economic growth based on money laundering empirically, even still blank field in China. Based on the panel data of 20 countries(or regions) , such as United States, Russia and China, this paper analyzes the effects of the attractiveness for money laundering and money laundering scale on economic growth. This paper aims to provide a basis for strengthening AML legislation, and tries to put forward suggestions for speeding up AML work in our country. The study shows that the attractiveness for money laundering and money laundering scale are significantly negatively correlated with economic growth. It means that money laundering will stunt economic growth. In addition, money laundering has more negative economic effects for developing countries. Therefore, countries?regions? should strengthen AML efforts to curb the spread of money laundering, thus maintaining the stability and development of world economy.Finally, based on the above conclusions, this paper puts forward some relevant policy suggestions in order to offer help for accelerating China's AML work.