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Title:Do Consumer Confidence Indexes Help Forecast Consumer Spending in Real Time? PDF Logo
Authors:Croushore, Dean
Issue Date:2004
Series/Report no.:Discussion paper Series 1 / Volkswirtschaftliches Forschungszentrum der Deutschen Bundesbank 2004,27
Abstract:Could a researcher or policy analyst use data reported from surveys of consumer confidence to improve forecasts of consumer spending? This issue has been examined in the literature previously, which reached the conclusion that consumer confidence helped improve the forecasts slightly. But that research was based on final, revised data and thus did not use the data that would have been available to forecasters in real time. This paper remedies that shortcoming, using the Real-Time Data Set for Macroeconomists to analyze the quality of forecasts made with indexes of consumer confidence. The main finding is that the indexes of consumer confidence are not of significant value in forecasting consumer spending. In fact, in some cases, they make the forecasts significantly worse.
JEL:E27
Document Type:Working Paper
Appears in Collections:Discussion Paper Series 1: Economic Studies, Deutsche Bundesbank

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