Information, Animal Spirits, and the Meaning of Innovations in Consumer Confidence

Robert Barsky and Eric Sims ()

No 15049, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Innovations to measures of consumer confidence convey incremental information about economic activity far into the future. Comparing the shapes of impulse responses to confidence innovations in the data with the predictions of a calibrated New Keynesian model, we find little evidence of a strong causal channel from autonomous movements in sentiment to economic outcomes (the "animal spirits" interpretation). Rather, these impulse responses support an alternative hypothesis that the surprise movements in confidence reflect information about future economic prospects (the "information" view). Confidence innovations are best characterized as noisy measures of changes in expected productivity growth over a relatively long horizon.

JEL-codes: E2 E3 E32 (search for similar items in EconPapers)
Date: 2009-06
New Economics Papers: this item is included in nep-mac
Note: EFG ME
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published as Robert B. Barsky & Eric R. Sims, 2012. "Information, Animal Spirits, and the Meaning of Innovations in Consumer Confidence," American Economic Review, American Economic Association, vol. 102(4), pages 1343-77, June.

Downloads: (external link)
http://www.nber.org/papers/w15049.pdf (application/pdf)

Related works:
Journal Article: Information, Animal Spirits, and the Meaning of Innovations in Consumer Confidence (2012)
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:nbr:nberwo:15049

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w15049

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().