expenditures are devoted to consumer spending, or personal consumption expenditures (PCE), which include most of retail sales, as well as households’ expenditures on such items as rent, utilities, and much of medical care. Because this is such a large sector of the economy, the forecast accuracy

the ways in which consumer and investor sentiment—what Keynes (1936, Chapter 12) referred to as “animal spirits”—might influence the real economy. Today, the outcome of monthly consumer confidence surveys provides steady fodder for the business and financial press and is treated as an important

This paper reports the results of three studies which provide strong evidence that weather can impact consumer spending. In particular, the results of the first study highlight the important effects of temperature, humidity, snow fall, and especially sunlight, in retail sales. The second study

The sharp rise in household debt and delinquency rates over the last year has led to speculation that consumers will soon revert to more cautious spending behavior. Yet an analysis of the past relationship between household liabilities and expenditures provides little support for this view

simple “sufficient-statistic ” formula: the marginal propensity to consume out of temporary income times the value of housing. Calibrated versions of the models generate house price effects that are both large and sensitive to the level of household debt in the economy. We apply our formula to micro data

Proceedings of a Conference

Although a large body of empirical research indicates that oil priceincreases have a significant negative effect on real GDP growth, con-siderable debate exists about both the strength and stability of the relation between oil prices and GDP. In particular, some analysts contend that the estimated linear relations between oil prices and several macroeconomic variables appear much weaker since the 1980s (Hooker 1996).1 The evidence of a weakening effect of an oil price change on the macro-economy in data since the 1980s happens to coincide with another change in the nature of oil price movements: Before 1981, most big oil price movements were positive. Since then, however, oil prices have moved significantly in both directions, reflecting the influences of endogenous macrodevelopments on oil prices. The choppy nature of oil price movements since the 1980s has led some analysts to argue that evidence indicating that oil price changes do not have much of an effect on real GDP is spurious and that the evidence arises from the use of endogenous oil price series. Hamilton (2003), in fact, posits that the relation between oil price changes and real GDP growth is nonlinear, namely, that oil price increases matter but oil price declines do not. Furthermore,

shifts in consumer spending could assist policy makers in smoothing out the business cycle. Our results suggest that the causal relationship between consumption and sentiment in Australia is more complicated than what Carroll et al suggest, and that the behaviour of consumption in Australia looks more

Many supporters of the tax cut enacted this summer viewed it as an important stimulus to consumer spending. But an analysis of the effects of earlier income tax cuts suggests that the consumer response to such initiatives is, in fact, quite variable. Two conclusions stand out: First, consumers

Three field studies investigate the interactive influence of a consumer's agency-communion orientation and the presence of an accompanying friend on the consumer's spending behaviors. In general, we find that shopping with a friend can be expensive -consumers spend more money when