Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/248595 
Year of Publication: 
2021
Series/Report no.: 
ISER Discussion Paper No. 1135
Publisher: 
Osaka University, Institute of Social and Economic Research (ISER), Osaka
Abstract: 
We offer a structural interpretation of survey measures of consumer confidence. Our approach is based on a simple forward-looking model of consumption. The model decomposes observed consumption uctuations in changes due to fundamentals, and changes due to temporary errors caused by noisy information. Our model-based measure, estimated using national accounts, closely mimics out-of-sample survey data in the U.S. and a majority of European countries. The results provide a theoretical foundation for the use of survey-based consumer confidence indices. In addition, since national accounts are an internationally consistent measure of activity, our structural method provides an alternative and internationally consistent measure of consumer confidence.
Subjects: 
Aggregate spending
confidence indices
noisy information
JEL: 
E21
E32
E66
Document Type: 
Working Paper

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