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Consumer confidence and economic growth: case studies of Jamaica and Trinidad and Tobago

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  • Dookie, Michele
  • Lugay, Beverly
  • Sergeant, Kelvin A.

Abstract

This study examined the causal link between consumer confidence and GDP in Jamaica and Trinidad and Tobago in the context of the vector autoregression (VAR) methodology. The interest rate and exchange rate were also included in the model as control variables. In the case of Jamaica, remittances were included due to its importance in the economy. The study argued that consumer confidence indices can be useful in economic forecasting, policymaking and business planning in Jamaica and Trinidad and Tobago. This usefulness is, however, built on the assumption that the index leads (or causes) aggregate economic conditions.

Suggested Citation

  • Dookie, Michele & Lugay, Beverly & Sergeant, Kelvin A., 2011. "Consumer confidence and economic growth: case studies of Jamaica and Trinidad and Tobago," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 4086, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    • Handle: RePEc:ecr:col095:4086
    Note: Includes bibliography
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    File URL: http://repositorio.cepal.org/handle/11362/4086
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    References listed on IDEAS

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    1. Sydney C. Ludvigson, 2004. "Consumer Confidence and Consumer Spending," Journal of Economic Perspectives, American Economic Association, vol. 18(2), pages 29-50, Spring.
    2. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    3. Granger, C. W. J., 1981. "Some properties of time series data and their use in econometric model specification," Journal of Econometrics, Elsevier, vol. 16(1), pages 121-130, May.
    4. Carroll, Christopher D & Fuhrer, Jeffrey C & Wilcox, David W, 1994. "Does Consumer Sentiment Forecast Household Spending? If So, Why?," American Economic Review, American Economic Association, vol. 84(5), pages 1397-1408, December.
    5. Robert Engle & Clive Granger, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
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    Cited by:

    1. Khayelihle Madlopha, 2019. "The Nexus between Consumer Confidence and Economic Growth in South Africa: An ARDL Bounds Testing Approach," Journal of Economics and Behavioral Studies, AMH International, vol. 11(2), pages 15-22.

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