ECIN Replication Package for "Consumer Confidence and Household Investment"
Principal Investigator(s): View help for Principal Investigator(s) Hashmat Khan, Carleton University
Version: View help for Version V3
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| Hamilton Filter | 01/06/2025 02:03:PM | ||
| SVAR | 01/06/2025 02:03:PM | ||
| VAR | 03/19/2025 05:45:AM | ||
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Project Description
Summary:
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Replication files for Consumer Confidence and Household Investment. Can consumer confidence account for the leading indicator property of household investment over the US business cycle? We find that it does. Consumer confidence leads household investment and housing starts by two and one quarter, respectively. Household investment increases in a persistent manner after a positive confidence shock, and so do total hours worked, output, and real house prices. Quantitatively, confidence shocks account for a substantial share of the forecast error variation in these variables. They are also unrelated to future supply-side fundamentals. Demand-side forces originating in consumers' social and psychological factors are, therefore, relevant for household investment dynamics.
Scope of Project
Subject Terms:
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Consumer Confidence;
Household Investment;
Confidence Shocks;
Business Cycles
JEL Classification:
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D12 Consumer Economics: Empirical Analysis
D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
D84 Expectations; Speculations
E22 Investment; Capital; Intangible Capital; Capacity
E32 Business Fluctuations; Cycles
D12 Consumer Economics: Empirical Analysis
D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
D84 Expectations; Speculations
E22 Investment; Capital; Intangible Capital; Capacity
E32 Business Fluctuations; Cycles
Manuscript Number:
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ECIN-MAR-2023-0108.R2
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