This paper investigates the effect of confidence on the Japanese economy by using vector autoregressions. Especially, I divide the total estimation period into two parts, pre- and post-bubble periods, and analyze the transition of that effect through the ages. It is shown that consumer...

People are consumers and voters. Their sentiment about the economy and the competence of their leaders determine their confidence level. This research note investigates whether economic conditions measured by changes in the recent consumption level modify the dynamics of confidence formation....

People are consumers and voters. Their sentiment about the economy and the competence of their leaders determine their confidence level. This research note investigates whether economic conditions measured by changes in the recent consumption level modify the dynamics of confidence formation....