With economic uncertainties on the rise, understanding the relationship between consumer price inflation and consumer confidence becomes increasingly vital. This thesis investigates the relationship between Consumer Price Inflation (CPI) and Consumer confidence, specifically within the context of Sweden. The relationship is examined through the Vector Autoregression (VAR) model, spanning from the period 2002 to 2023. Drawing upon existing literature and theoretical frameworks in economics and psychology, this research provides a deeper understanding of the relationship between the two variables. By incorporating data up to 2023, this thesis will also examine the effects of the Covid-19 pandemic on the relationship between these key macroeconomic indicators. The results show statistically significant evidence that consumer price inflation predicts consumer confidence. Thus, we conclude that consumer price inflation plays a significant role in the dynamics of consumer confidence, influencing both economic conditions and expectations.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:hj-64764 |
| Date | January 2024 |
| Creators | Mtawali, Joyce, Taha, Gumush |
| Publisher | Jönköping University, IHH, Nationalekonomi |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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