Consumer Confidence Index and Economic Growth: An Empirical Analysis of EU Countries
Consumer Confidence Index and Economic Growth: An Empirical Analysis of EU Countries

Summary/Abstract: Consumer Confidence Index (CCI) plays an important role through providing decision makers andeconomic forecasters with required information about present and future economic condition. These indicesplay a unique role in determining public policies as well as business decisions. Consumer confidence indexdefines the degree of optimism on the current state of the economy that consumers are expressing throughtheir activities of saving and spending which lead to economic growth of the country. Positive changes inconsumer confidence should lead to the economic growth while negative changes impede the economicgrowth of the countries. This study is an attempt to empirically evaluate the link between the CCI andeconomic growth of the selected European countries: United Kingdom, Germany, France, Denmark andNetherland. Panel co-integration procedures are applied to establish the long run relationship between theCCI and economic growth for the period of 1996 (1)-2012 (4). Empirical results show the existence of thelong run relationship between consumer confidence and economic growth.

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