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Consumer Confidence and Elections

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  • Hardouvelis, Gikas A
  • Thomakos, Dimitrios D

Abstract

We investigate the behavior of consumer confidence around national elections in the EU-15 countries during 1985:1-2007:3. Consumer confidence increases before the date of elections and falls subsequently by almost the same amount. It is able to predict the strength of the performance of the incumbent party and its probability of re-election both alone and in the presence of macro- economic and fiscal variables. The post-election drop is negatively related to the previous run up and is a function of the political - but not the economic - environment. A similar rise and fall characterizes consumer confidence in the United States.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6701.

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Date of creation: Feb 2008
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Handle: RePEc:cpr:ceprdp:6701

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Keywords: consumer confidence; EU-15; fiscal conditions; incumbent party; macro-economy; national elections; political business cycle; USA;

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References

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Cited by:
  1. Dudek, Sławomir, 2008. "Consumer Survey Data and short-term forecasting of households consumption expenditures in Poland," MPRA Paper 19818, University Library of Munich, Germany.
  2. Bahram Adrangi & Joseph Macri, 2011. "Consumer Confidence and Aggregate Consumption Expenditures in the United States," Review of Economics & Finance, Better Advances Press, Canada, vol. 1, pages 1-18, February.

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