A study on confidence indexes in Turkey under structural breaks for the period covering the Covid-19 Pandemic
Abstract
The most important feature of confidence indicators is probably the information they provide about the major determinants of consumption, production, and investment decisions. As they indicate future patterns of consumption, production, and investments, many economic agents including households, businesses, and central banks integrate these indicators into their processes of forecasting and decision-making. In this context, confidence indexes, which are used basically to assess the expectations of households and businesses regarding the economic outlook, have the power to reflect the changes in macroeconomic fundamentals. The key objective of this paper is to analyze the trend of confidence indexes for Turkey from 2012:05 through 2020:09. In this study, we employ the Carrion-i Silvestre et al. (2009) unit root test which accounts for multiple structural breaks to test the stationary of the consumer, financial services, and real sector confidence indexes. We find that the financial and real sector confidence indexes have a stable trend, while the consumer confidence index does not have a consistent pattern in the relevant period. Our analysis also provides information regarding the dates of structural breaks.
Keywords
Kaynakça
- Akerlof, G. A., & Shiller, R. J. (2009). Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism, Princeton University Press.
- Barsky, R. B. & Sims, E. R. (2012). Information, Animal Spirits, and the Meaning of Innovations in Consumer Confidence, The American Economic Review, 102(4), 1343-1377.
- Bram, J. & Ludvigson, S. C. (1998). Does Consumer Confidence Forecast Household Expenditure? A Sentiment Index Horse Race, Economic Policy Review, 4(2), 59-78.
- Cass, D. & Shell, K. (1983). Do Sunspots Matter?, Journal of Political Economy, 91(2), 193-227.
- Central Bank of the Republic of Turkey (2020). Electronic Data Delivery System (EVDS), Available at: https://evds2.tcmb.gov.tr/index.php?/evds/serieMarket Access date: 20.02.2020.
- Central Bank of the Republic of Turkey (2019). Financial Services Statistics and Financial Services Confidence Index. Available at: https://www.tcmb.gov.tr/wps/wcm/connect/9d2d0544-b3bd-4641-aed9-cf82621a905b/FSS-Report-Int.pdf?MOD=AJPERES&CACHEID=ROOTWORKSPACE-9d2d0544-b3bd-4641-aed9-cf82621a905b-mCBazHv. Access Date: 13.05.2019.
- Desroches, B. & Gosselin, M. A. (2002). The Usefulness of Consumer Confidence Indexes in the United States, Bank of Canada, Working Paper 2002-22.
- European Central Bank (2013), Monthly Bulletin, January 2013), Available at: https://www.ecb.europa.eu/pub/pdf/other/art1_mb201301en_pp45-58en.pdf Access date: 21.09.2019.
- Eyuboglu, K. & Eyuboglu, S. (2017). Ekonomik Güven Endeksi İle Hisse Senedi Fiyatları Arasındaki İlişkinin İncelenmesi: Türkiye Örneği, Gazi Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 19/2 (2017) 603-614.
- Fair, R. C. (1971). Consumer Sentiment, the Stock Market and Consumption Functions, Princeton University Econometric Research Program Research Memorandum, No: 119.
