Panel cointegration analysis of consumer confidence and personal consumption in the European Union

Sadullah Çelik and Yasemin Özerkek

Journal of Business Economics and Management, 2008, vol. 10, issue 2, 161-168

Abstract: This study examines the relationship between consumer confidence, personal consumption, and other relevant economic and financial variables for 9 European Union countries. It is argued that consumer confidence is an early indicator of future rates of growth in an economy through the consumption channel. Therefore, an increase in consumer confidence should translate into higher rates of consumption in the future, leading to a possible rise in economic growth. Our panel data analysis, conducting panel unit root tests and panel cointegration tests, tries to measure the effects of changes in consumer sentiment on personal consumption expenditures while accounting for other significant economic and financial variables such as stock exchange index, real exchange rates and interest rates. The empirical findings show the existence of a long‐run relationship. Thus, consumers are able to detect early signals about future rates of economic growth as they contribute through the consumption channel.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.3846/1611-1699.2009.10.161-168 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jbemgt:v:10:y:2008:i:2:p:161-168

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TBEM20

DOI: 10.3846/1611-1699.2009.10.161-168

Access Statistics for this article

Journal of Business Economics and Management is currently edited by Izolda Joksiene, Romualdas Ginevicius and Ieva Meidute

More articles in Journal of Business Economics and Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().