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Consumer Confidence and Elections

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  • Gikas Hardouvelis
  • Dimitrios Thomakos

Abstract

We investigate the behavior of consumer confidence around national elections in the EU-15 coun- tries during 1985:1-2007:3. Consumer con¯dence 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 political 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.

Suggested Citation

  • Gikas Hardouvelis & Dimitrios Thomakos, 2007. "Consumer Confidence and Elections," Working Papers 0003, University of Peloponnese, Department of Economics.
  • Handle: RePEc:uop:wpaper:0003
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    Cited by:

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    More about this item

    Keywords

    consumer confidence; national elections; incumbent party; macro-economy; fiscal conditions; political business cycle; EU-15; USA.;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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