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Title: Economic Sentiment Shocks and Fluctuations in Economic Activity in the Euro Area and the USA
Authors: VAN AARLE, Bas 
Kappler, Marcus
Issue Date: 2012
Source: Intereconomics, 47 (1), p. 44-51
Abstract: Economic sentiment indicators can provide a wealth of information for macroeconomic policy formulation and analysis. Despite this, economic sentiment is often neglected by mainstream economics. This article assesses whether there is a potential role for economic sentiment to amplify business cycle fluctuations. This paper integrates the European Commission Economic Sentiment Indicator data into an econometric analysis of the euro area business cycle. The investigation of the euro area economy suggests that sentiment shocks do have an impact on important macroeconomic variables such as output, retail sales, and unemployment. There is furthermore significant evidence that economic conditions and shocks affect economic sentiment.
Keywords: economic activity; Eurozone; economic conditions; United States; economic conditions; macroeconomics; business cycles; unemployment
Document URI:
DOI: 10.1007/s10272-012-0405-z
Category: A1
Type: Journal Contribution
Validations: vabb 2014
Appears in Collections:Research publications

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