The power of sentiment: Irrational beliefs of households and consumer loan dynamics
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F61989100%3A27510%2F22%3A10249823" target="_blank" >RIV/61989100:27510/22:10249823 - isvavai.cz</a>
Alternative codes found
RIV/00216224:14560/22:00125370 RIV/00216208:11230/22:10454269
Result on the web
<a href="https://www.sciencedirect.com/science/article/pii/S157230892200002X" target="_blank" >https://www.sciencedirect.com/science/article/pii/S157230892200002X</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.1016/j.jfs.2022.100973" target="_blank" >10.1016/j.jfs.2022.100973</a>
Alternative languages
Result language
angličtina
Original language name
The power of sentiment: Irrational beliefs of households and consumer loan dynamics
Original language description
We examine whether household sentiment can explain fluctuations in newly issued consumer loans. We construct a novel measure of household sentiment using detailed data from the harmonized consumer surveys conducted in European countries. We differentiate between rational sentiment, which mimics dynamics in macroeconomic fundamentals, and irrational sentiment, which proxies households' optimism/pessimism on top of their rationally sourced beliefs. We show that shocks to the sentiment of households do have a measurable impact on growth of consumer loans. Specifically, we assert a significantly positive role of irrational sentiment on top of the economic fundamentals identified in the literature. Moreover, a closer examination reveals that the studied relationship is not symmetric over the business cycle - the effect of irrational sentiment is present only in periods in which a country's output is well above its potential.
Czech name
—
Czech description
—
Classification
Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
—
OECD FORD branch
50200 - Economics and Business
Result continuities
Project
<a href="/en/project/GA19-19485S" target="_blank" >GA19-19485S: Spatial Dynamics and Inequality: The Role of Connectivity and Access to Finance</a><br>
Continuities
P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)
Others
Publication year
2022
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Name of the periodical
Journal of Financial Stability
ISSN
1572-3089
e-ISSN
1878-0962
Volume of the periodical
59
Issue of the periodical within the volume
April
Country of publishing house
US - UNITED STATES
Number of pages
16
Pages from-to
"Article Number 100973"
UT code for WoS article
000781270000002
EID of the result in the Scopus database
2-s2.0-85124005294