Figure 1
From: Estimating money laundering flows with a gravity model-based simulation
Simplified numerical example of the procedure for four countries and only two rounds of international flows. In round 0, criminals decide whether they launder their criminal money domestically or internationally (related to Eq. (3)). The criminal money that is sent abroad is distributed over the other countries by the international flow percentages matrix (see Eq. (4)). In round 1, the inflows are calculated by taking the sum of the columns of the international flow matrix. This amount is then sent abroad in round 2 (see Eqs. (5)–(7)). In the final round (round 2 in this example) the inflows to each country are laundered in that country. In the actual simulation of this paper, we use five rounds of international flows.
