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Information, Animal Spirits, and the Meaning of Innovations in Consumer Confidence / Robert B. Barsky, Eric R. Sims.
- Format:
- Book
- Author/Creator:
- Barsky, Robert B.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w15049.
- NBER working paper series no. w15049
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2009.
- Summary:
- Innovations to measures of consumer confidence convey incremental information about economic activity far into the future. Comparing the shapes of impulse responses to confidence innovations in the data with the predictions of a calibrated New Keynesian model, we find little evidence of a strong causal channel from autonomous movements in sentiment to economic outcomes (the "animal spirits" interpretation). Rather, these impulse responses support an alternative hypothesis that the surprise movements in confidence reflect information about future economic prospects (the "information" view). Confidence innovations are best characterized as noisy measures of changes in expected productivity growth over a relatively long horizon.
- Notes:
- Print version record
- June 2009.
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