Radovan Fiser

Confidence, Economy and the Global Economic Crisis: the Role of Confidence in Economic Fluctuations Radovan Fiser

We examine the role of confidence in economic fluctuations. Empirically we examine Granger causality from consumer confidence indicator to growth of economic output in the Czech Republic and the United States. In case of the U. S., we confirmed the causality robustly. In case of the Czech Republic, we found the causality, but not a robust one. Generally, the causality is taken as evidence for macroeconomic models with shocks to consumers's expectations. Recently, these models with unique- equilibrium gain on importance in economic theory. The second focus of this study is the confidence- related part of the financial and economic crisis of late 2000s which made confidence indicators hit record lows. Confidence has been cited as both a source of the crisis and the remedy to the crisis. We analyze such thoughts. One of the main ones is the incorporation of animal spirits into mainstream economomics.