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Does Economic Growth and Inflation Impact Consumer Confidence during a Pandemic? An Empirical Analysis in EU Countries

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  • Bătrâncea Larissa

    (Babeş-Bolyai University, Faculty of Business, Romania)

Abstract

The study investigates the capacity of European Union member states to face the effects of the economic crisis caused by the COVID-19 pandemic. Namely, by means of a panel data analysis, the study reports on the impact of economic growth (proxied by gross domestic product) and inflation rates (proxied by harmonized indices of consumer prices) on the overall confidence indicator corresponding to 27 EU countries for the period fourth quarter 2019–third quarter 2020. Results showed that inflation had a negative influence on the confidence indicator during the pandemic crisis, while economic growth had no impact. The negative effect triggered by inflation uncovered the impact of monetary policies and fiscal policies on the staggering level of public debt. The study emphasizes that inflation plays a significant role in the market economy, reason for which governments should monitor this factor when trying to stimulate the economy and set appropriate policies for eliminating negative consequences of potential future recession periods.

Suggested Citation

  • Bătrâncea Larissa, 2020. "Does Economic Growth and Inflation Impact Consumer Confidence during a Pandemic? An Empirical Analysis in EU Countries," Marketing – from Information to Decision Journal, Sciendo, vol. 3(1), pages 5-13, June.
    • Handle: RePEc:vrs:mfitdj:v:3:y:2020:i:1:p:5-13:n:1
    DOI: 10.2478/midj-2020-0001
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    More about this item

    Keywords

    Confidence index; Economic growth; Inflation rates; Pandemic;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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