Interaction Between Consumer Confidence And The Economic Environment

Consumer confidence index, as a subjective indicator which reflect consumerpsychology, not only is affected by the objective economic variables, but also affectconsumer spending. The purpose of this paper is to research consumer confidence index, asan intermediate hidden variable, how to play a role in the macroeconomic environment.By the vector autoregression model, this thesis study the impact that macroeconomicvariable lead to the consumer confidence sub-indices, the internal relationship amongconsumer confidence index and the effect consumer confidence sub-indices lead to theretail sales.From the impact macroeconomic variable lead to the consumer confidencesub-indices, people’s confidence in price and investment are respectively affected by CPIand the Shanghai Composite Index, and confidence in employment, income and househoodprice are respectively affected by the proportion of vacancies accounted for job seekers, thegrowth of urban residents’ disposable income and live class consumer price index. Inregard to the internal relationship among consumer confidence index, people’s confidencein economic and life cover the information of confidence in price, househood price,employment, investment and income. About the effect consumer confidence sub-indiceslead to the retail sales, people’s confidence in economic, life, price, househood price,employment, investment and income affect the retail sales significantly, specific consumerconfidence sub-indices can not only affect retail sales directly, but also are affectedindirectly by confidence in economic and life.As a whole, when formulate policy on stimulating consumption, the government mayrefer to the lag, duration and contribution of effect, regulate multiple macroeconomicvariable at the same time, in order to upgrade consumer confidence and stimulate domesticconsumption and economic growth.