Confidence and economic activity in Europe

Alessandro Saccal

MPRA Paper from University Library of Munich, Germany

Abstract: This work supplies additional empirical evidence of responses in real economic activity to shocks in confidence. A structural vector autoregression (SVAR) featuring confidence, real consumption and real output is constructed with respect to the Euro area and eight European nations. Results are mixed: responses exhibit reversibility and irreversibility, suggesting the formulation of a theoretical mechanism capable of formalising such a variety. The potential causes behind confidence in the same nations are moreover evaluated through a panel data regression. Results indicate aversion towards output, inflation, unemployment, monetary independence and financial openness, but favour population, exchange rate rigidity and the accumulation of sovereign debt.

Keywords: confidence; economic activity; Europe. (search for similar items in EconPapers)
JEL-codes: C32 C33 E37 (search for similar items in EconPapers)
Date: 2021-07-17
New Economics Papers: this item is included in nep-eec and nep-mac
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https://mpra.ub.uni-muenchen.de/108812/1/MPRA_paper_108812.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/117482/1/Confidenc ... 0%28published%29.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:108812

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