The Link between Government Spending, Consumer Confidence and Consumption Expenditures in Emerging Market Countries

Yasemin Özerkek () and Sadullah Çelik ()

Panoeconomicus, 2010, vol. 57, issue 4, 471-485

Abstract: The impact of government spending on private consumption is extensively studied in the literature. However, the main theme of these studies is the possible crowding-in or crowding-out impact of government spending on consumer spending. This paper attempts to introduce a new variable to this well-known literature by investigating the existence of a relationship between government expenditure, consumer spending and consumer confidence for a group of emerging market countries. We examine whether a change in consumer confidence causes any change in government spending. Moreover, we analyze whether there is a feedback from government spending and private consumption to consumer confidence. Our empirical findings demonstrate the important role of consumer confidence on government spending and private consumption expenditures. Key words: Government spending, Consumer confidence, Consumption spending.JEL: C23, E21, E62.

Keywords: Government spending; Consumer confidence; Consumption spending (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:voj:journl:v:57:y:2010:i:4:p:471-485:id:201

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