IS CONSUMER CONFIDENCE INDEX A SUITABLE PREDICTOR OF FUTURE ECONOMIC GROWTH? AN EVIDENCE FROM THE USA

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F47813059%3A19520%2F17%3A00010827" target="_blank" >RIV/47813059:19520/17:00010827 - isvavai.cz</a>

Result on the web

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DOI - Digital Object Identifier

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Result language

angličtina

Original language name

IS CONSUMER CONFIDENCE INDEX A SUITABLE PREDICTOR OF FUTURE ECONOMIC GROWTH? AN EVIDENCE FROM THE USA

Original language description

The problem of the prediction of business cycles, and economic recessions in particular, belongs among the most important topics of contemporary macroeconomics. However, economists were not considerably successful when dealing with the recession forecasting so far, notably, the Great Recession of the late 2000s and early 2010s emerged rather surprisingly. The aim of this paper is to examine the statistical relationship (in terms of Granger causality) between the Consumer Con?dence Index (CCI) and real GDP growth in the USA from 1960 to 2015 in order to ?nd whether the CCI can be a suitable predictor of the economic growth, or economic recessions respectively. Also the short-term dynamics of four periods covering US economic recessions (1967-1978, 1975-1985, 1995-2005, and 2005-2015) was examined. The main results are that the CCI Granger causes GDP in the long-run, with the lag of 6 months. As for shorter periods, the CCI Granger caused GDP in three out of four examined periods, inclu ding the Great Recession (with the lag of 3 months), and only for the so called dot-com bubble period Granger causality was reversed, with GDP causing the CCI with the lag of 6 months. These results indicate that the CCI can be considered a suitable predictor of GDP at least for the USA, but more complex and broader study, including other major economics such as the European Union, Germany, or Japan, is certainly needed.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

50202 - Applied Economics, Econometrics

Project

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Continuities

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2017

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

E+M Ekonomie a Management

ISSN

1212-3609

e-ISSN

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Volume of the periodical

20

Issue of the periodical within the volume

2

Country of publishing house

CZ - CZECH REPUBLIC

Number of pages

6

Pages from-to

30-45

UT code for WoS article

000405644600003

EID of the result in the Scopus database

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