Artikel
Economic policy and confidence of economic agents: A causal relationship?
The purpose of this paper is to study whether innovations in monetary and fiscal policy are a leading indicator of future business and consumer confidence and reverse applying the panel Granger causality analysis to two periods in the history of the euro area: before and after the start of the Great Recession. The results show that Granger causality interaction between the confidence of economic agents and the stance of monetary policy (measured by the shadow rate) is stronger than between the former and the fiscal policy instruments. The European Central Bank (ECB) shadow rate innovations Granger caused business and consumer confidence in both periods, but also indicators of confidence Granger caused the shadow rate. No such feedback could be established between two fiscal policy instruments (government expenditure and revenue growth) and the indicators of confidence. Government spending and revenues Granger caused business confidence in the first subperiod, but not in the second subperiod when the causality reversed. The government revenues Granger caused consumer confidence in the first subperiod, while government expenditures in the second subperiod. Consumer confidence Granger caused government spending in the first subperiod.
- Language
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Englisch
- Bibliographic citation
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Journal: Review of Economic Perspectives ; ISSN: 1804-1663 ; Volume: 20 ; Year: 2020 ; Issue: 4 ; Pages: 471-484 ; Warsaw: De Gruyter
- Classification
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Wirtschaft
Monetary Policy
Fiscal Policy
Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
Fiscal Policies and Behavior of Economic Agents: Household
Fiscal Policies and Behavior of Economic Agents: Firm
- Subject
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fiscal policy
monetary policy
consumer confidence
business confidence
panel Granger causality
- Event
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Geistige Schöpfung
- (who)
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Dajčman, Silvo
- Event
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Veröffentlichung
- (who)
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De Gruyter
- (where)
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Warsaw
- (when)
-
2020
- DOI
-
doi:10.2478/revecp-2020-0023
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Dajčman, Silvo
- De Gruyter
Time of origin
- 2020
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