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Contribution to Book
Expenditure, Confidence, and Uncertainty: Identifying Shocks to Consumer Confidence Using Daily Data
Upjohn Institute Working Papers
  • Marta Lachowska, W.E. Upjohn Institute
Year
2013
Series
Upjohn Institute working paper ; 13-197
DOI
10.17848/wp13-197
Abstract
The importance of consumer confidence in stimulating economic activity is a disputed issue in macroeconomics. Do changes in confidence represent autonomous fluctuations in optimism, independent of information on economic fundamentals, or are they a reflection of economic news? I study this question by using high-frequency microdata on spending and consumer confidence, and I find that consumer confidence contains information relevant to predicting spending, independent from other indicators. The exogenous movements in consumer confidence lead to very short fluctuations in consumer spending, consistent with the hypothesis that more consumer confidence reflects less uncertainty about the future.
Issue Date
June 7, 2013
Citation Information
Lachowska, Marta. 2013. "Expenditure, Confidence, and Uncertainty: Identifying Shocks to Consumer Confidence Using Daily Data." Upjohn Institute Working Paper 13-197. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research