Confidence and Unemployment in the European Union: A lesson from the 2004 enlargement

António Caleiro

Notas Económicas, 2007, issue 26, 15-26

Abstract: We use data for the monthly unemployment rate and consumer confidence indicator in the European Union to study whether there is a relationship between unemployment and confidence. Our estimation method is based on a fuzzy logic methodology with a Gaussian membership function. We find a stronger relationship between unemployment and confidence than it is apparent. We show in an ex-post prediction study that this relationship did not change, in a significant way, after the 2004 enlargement of the European Union. This fact constitutes a lesson for the post-2007 enlargement period. The link between unemployment and confidence has important policy implications given its relevance, in particular for the (latest call for a new start of the) Lisbon Strategy.

JEL-codes: C10 C82 E24 E61 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:gmf:journl:y:2007:i:26:p:15-26

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