Consumer confidence as a predictor of consumption spending: Evidence for the United States and the Euro area
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In this paper, the authors assess empirically the link between consumer sentiment and consumption expenditures for the United States and the euro area and show that the consumer confidence index can be in certain circumstances a good predictor of consumption.About:
This article is published in International Economics.The article was published on 2013-08-01 and is currently open access. It has received 113 citations till now. The article focuses on the topics: Consumer confidence index & Consumer spending.read more
Figures
Figure 8: Historical forecast error decomposition Euro area 
Figure 11: Euro area: Consumption growth (rhs) and change in con dence (lhs). 
Figure 4 shows the impulse response functions of a shock to con dence on real consumption in the United States. The impulse responses of the con dence shocks appear signi cant for two periods ahead but insigni cant at the 95% level for future periods. The variance decomposition (not shown here) also shows some e¤ect of con dence on consumption (slightly more than 10% of the variance would be due to con dence), though the con dence bounds4 shows that the degree of signi cance remains borderline.
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Is housing still the business cycle? Perhaps not
TL;DR: This article showed that residential investment led GDP under a wide range of specifications, while non-residential investment did not, and showed that the increasing stringency of local land use policy had interfered with the ability of the Federal Reserve to use housing as an instrument on monetary policy.
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Consumer confidence and consumption expenditure in Indonesia
TL;DR: In this paper, the authors estimate several competing regressions and find that confidence predicts consumption expenditure in Indonesia and show that there are economic and statistical gains from consumption growth frameworks that account for consumer and business sentiments.
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Does Consumer Confidence Forecast Household Saving and Borrowing Behavior? Evidence for Poland
TL;DR: This study investigates the effects of consumer confidence on household saving and borrowing behavior that are unsatisfactorily considered in previous discussions and finds that the multiple linear regression analysis of Polish time-series data gives positive answers to both questions.
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A new approach for the quantification of qualitative measures of economic expectations
TL;DR: In this article, a data-driven procedure based on evolutionary computation that avoids making any assumption about agents' expectations was proposed to quantify qualitative survey data about the direction of change is presented.
References
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Statistical inference in vector autoregressions with possibly integrated processes
Hiro Y. Toda,Taku Yamamoto +1 more
TL;DR: In this paper, the authors show how to estimate VAR's formulated in levels and test general restrictions on the parameter matrices even if the processes may be integrated or cointegrated of an arbitrary order.
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Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence
TL;DR: In this article, the authors show that no variable apart from current consumption should be of any value in predicting future consumption, except real disposable income, which has no predictive power for consumption, but rejected for an index of stock prices.
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Approximately normal tests for equal predictive accuracy in nested models
Todd E. Clark,Kenneth D. West +1 more
TL;DR: In this article, the authors compare a parsimonious null model to a larger model that nests the null model and observe that the mean squared prediction error (MSPE) from the parser is therefore expected to be smaller than that of the larger model.
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An Area Wide Model (AWM) for the Euro Area
TL;DR: In this article, the authors present a quarterly estimated structural macroeconomic model for the euro area, denoted area-wide model (AWM), which is designed to have a long run equilibrium consistent with classical economic theory, while its short run dynamics are demand driven.
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Multidimensional Uncertainty and Herd Behavior in Financial Markets
Christopher Avery,Peter Zemsky +1 more
TL;DR: The authors studied the relationship between asset prices and herd behavior, which occurs when traders follow the trend in past trades, and found that when traders have private information on only a single dimension of uncertainty (the effect of a shock to the asset value), price adjustments prevent herd behavior.
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