Do Swedish Consumer Confidence Indicators Do What They Are Intended to Do?
Bengt Assarsson () and
Pär Österholm ()
No 139, Working Papers from National Institute of Economic Research
In this paper, we investigate whether the two main consumer confidence indicators available for Sweden – that of the National Institute of Economic Research and that of the European Commission – can nowcast Swedish household consumption expenditure. In a simulated out-of sample nowcast exercise, we find that the consumer confidence indicator of the National Institute of Economic Research appears most useful for this purpose. The root mean square error of the nowcast from the model employing this indicator is the lowest of all the studied models which rely on survey data. The nowcasting performance of the model using the consumer confidence indicator of the European Commission is less impressive; while it outperforms the simplest possible benchmark model, its root mean square error is considerably higher than that of the model relying on the consumer confidence indicator of the National Institute of Economic Research. An implication of our findings is that while the European Commission’s survey programme may have been successful in creating a set of harmonised data for the member countries of the European Union, it is not obvious that the harmonised indicators are the most relevant ones for analysis, nowcasting or forecasting in each country.
Keywords: Household consumption; Nowcasting (search for similar items in EconPapers)
JEL-codes: E21 E27 (search for similar items in EconPapers)
Pages: 16 pages
New Economics Papers: this item is included in nep-eec, nep-for and nep-mac
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Journal Article: Do Swedish Consumer Confidence Indicators Do What They Are Intended to Do? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:nierwp:0139
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