FDI, Income inequality, Globalization, Trade volume, Panel cointegration, C10, F01, F15, J30,

Abstract. This study examines the relationship between consumer confi dence, personal consumption, and other relevant economic and fi nancial variables for 9 European Union countries. It is argued that consumer confi dence is an early indicator of future rates of growth in an economy through the consumption channel. Therefore, an increase in consumer confi dence should translate into higher rates of consumption in the future, leading to a possible rise in economic growth. Our panel data analysis, conducting panel unit root tests and panel cointegration tests, tries to measure the effects of changes in consumer sentiment on personal consumption expenditures while accounting for other signifi cant economic and fi nancial variables such as stock exchange index, real exchange rates and interest rates. The empirical fi ndings show the existence of a longrun relationship. Thus, consumers are able to detect early signals about future rates of economic growth as they contribute through the consumption channel.

The impact of government spending on private consumption is extensively studied in the literature. However, the main theme of these studies is the possible crowding-in or crowding-out impact of government spending on consumer spending. This paper attempts to introduce a new variable to this well-known literature by investigating the existence of a relationship between government expenditure, consumer spending and consumer confidence for a group of emerging market countries. We examine whether a change in consumer confidence causes any change in government spending. Moreover, we analyze whether there is a feedback from government spending and private consumption to consumer confidence. Our empirical findings demonstrate the important role of consumer confidence on government spending and private consumption expenditures

No abstract

The aim of this article is to analyse Turkey's bilateral trade dynamics with respect to a panel of seven countries. Employing several panel cointegration techniques, we show that the effect of a devaluation of Turkish currency on trade balance is country specific and there is no J-curve effect.