Animal spirits and household spending in Europe and the US
B. Öztürk and
Ad Stokman ()
Economics Letters, 2019, vol. 185, issue C
We investigate whether consumer confidence has an independent effect on household spending. First, we determine a common set of factors that drive both consumer confidence and household spending. Next, we interpret the non-systematic residuals in the country consumer confidence equations as a proxy for animal spirits and include this proxy in the spending equations as an additional explanatory variable. Our results suggest that animal spirits exist and may have a considerable impact on spending growth in Europe and the US.
Keywords: Animal spirits; Private consumption (search for similar items in EconPapers)
JEL-codes: E21 E71 (search for similar items in EconPapers)
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Working Paper: Animal spirits and household spending in Europe and the US (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:185:y:2019:i:c:s0165176519303477
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