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Examining the Role of Consumer Confidence Within an IS Curve Framework [electronic Resource]

Canada. Department of FinanceUmar Ahmed Faruqui

出版	Department of Finance, Economic and Fiscal Policy Branch, 2004
URL	http://books.google.com.hk/books?id=_L0slwEACAAJ&hl=&source=gbs_api

註釋

Consumer confidence indices are often viewed as leading indicators of economic activity. This paper investigates the role of these indices in forecasting output growth for the United States and Canada within an IS-curve framework. In a Keynesian macroeconomic model, this is the curve representing the combinations of national income & interest rate at which aggregate demand equals supply for all goods. After a review of the literature on the use of consumer confidence indices in forecasting, the paper presents a descriptive analysis of the most widely followed measures of US & Canadian consumer confidence. It then introduces the IS-curve equations from the Canadian & US versions of the small-scale North American Open Economy Macro-Econometric Integrated Model (NAOMI) which form this study's benchmark models. This is followed by a discussion of the most appropriate manner to model confidence in an IS-curve framework. Empirical results are presented to test whether change in consumer confidence plays a role in forecasting output growth.