CONSUMER CONFIDENCE AND ECONOMIC GROWTH – A 消费者信心和经济增长–一.pptVIP

CONSUMER CONFIDENCE AND ECONOMIC GROWTH – A CASE STUDYBYKELVIN A SERGEANT Paper presented at the 4th Biennial International Conference on Business, Banking and Finance – Theme Restoring Business Confidence Investments in the Caribbean June 22 – 24, 2011 Hilton Trinidad and Conference Centre OBJECTIVES OF THE STUDY To identify the functional identity of consumer confidence. To determine the relationship between CCI and economic growth( as well as interest rates and the exchange rate To determine if a long-run relationship exists (co-integration) To see if we can make conclusions on based on the psychological framework of consumers WHAT IS A CONSUMER CONFIDENCE INDEX? A consumer confidence index measures how consumers feel about several economic factors. The measure is based on several questions put by an interviewer to the consumer. The result which is represented by a numerical value, speaks to consumers evaluation of their own financial situation, employment chances, expenditure intentions and their opinion of general economic conditions. WHAT IS THE RATIONALE FOR SUCH AN INDEX? Consumption is an important determinant in any economy Personal consumption expenditure usually represents the single largest sector or driver of GDP (income side) The CCI seeks to gauge consumer spending through consumer sentiment Consumer confidence is measured or observed through consumer surveys The most famous and oldest measure of CC is the US survey conducted by the Conference Board and the University of Michigan Consumer Sentiment index FEATURES OF THE CCI The CCI may be related to macroeconomic variables such as inflation Relating the index to macroeconomic variables suggest that confidence is boosted by lower inflation, lower interest rates and higher real income Consumer confidence is called a lagging indicator in that current behaviour is based on the past and it can take some time to turn around Enterprises make use of consumer indices to enhance the sophis