Business Cycles and the Role of Confidence: Evidence for Europe

2007

114 citations recorded by the source corpus.

This paper examines whether indicators of consumer and business confidence can predict movements in GDP over the business cycle for four European economies. The empirical methodology used to investigate the properties of the data comprises cross-correlation statistics, implementing an approach developed by den Haan ["Journal of Monetary Economics" (2000) , Vol. 46, pp. 3-30]. The predictive power of confidence indicators is also examined, investigating whether they can predict discrete events, namely economic downturns, and whether they can quantitatively forecast point estimates of economic activity. The results indicate that both consumer and business confidence indicators are procyclical and generally play a significant role in predicting downturns. Copyright Blackwell Publishing Ltd and the Department of Economics, University of Oxford 2007.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/bccc119ed30aab0fcc9a56cf64387048fbf68104

Citations in the corpus

• Debt and Financial Expectations: An Individual- and Household-Level Analysis (2005, unknown): “At the macroeconomic level, a number of studies have investigated the impact of consumer expectations upon either business cycle trends [see McNabb and Taylor (2002)] or household consumption patterns [see Acemoglu and Scott (1994) for the UK and Carroll et al. (1994) for the US].”
• Rational Forecasts or Social Opinion Dynamics? Identification of Interaction Effects in a Business Climate Survey (2009, unknown): “Due to the underlying motivation for collecting such data, much of the limited body of available literature focuses on the predictive power for macroeconomic activity of these surveys (cf. Hüfner and Schröder, 2002; Gelper et al., 2007, Taylor and McNabb, 2007).”