What Makes a Good Economy? Evidence from Public Opinion Surveys

Forthcoming, Economic Inquiry

34 Pages Posted: 10 Jul 2009 Last revised: 20 Sep 2013

See all articles by Darren P. Grant

Darren P. Grant

Sam Houston State University - College of Business Administration - Department of Economics and International Business

Multiple version iconThere are 2 versions of this paper

Date Written: September 19, 2013

Abstract

Thirty-five years of previously unstudied survey data are analyzed to determine how the American public evaluates the health of the macroeconomy. Survey responses are multi-dimensional, distinct from indexes of “consumer sentiment,” and based mostly on genuine perceptions of economic conditions, not media reports of economic statistics. Both “intangibles” and macroeconomic fundamentals explain substantial variation in the survey data; the public equates three to five percentage points of inflation with one percentage point of unemployment. This tradeoff resembles that revealed in happiness surveys and assumed by a simple loss function used in some models of monetary policy.

Keywords: business cycle, consumer comfort, macroeconomic surveys

JEL Classification: E30, E66

Suggested Citation

Grant, Darren P., What Makes a Good Economy? Evidence from Public Opinion Surveys (September 19, 2013). Forthcoming, Economic Inquiry. Available at SSRN: https://ssrn.com/abstract=1432136 or http://dx.doi.org/10.2139/ssrn.1432136

Darren P. Grant (Contact Author)

Sam Houston State University - College of Business Administration - Department of Economics and International Business ( email )

SHSU Box 2118
Huntsville, TX 77341-2118
United States
936-294-4324 (Phone)

HOME PAGE: http://www.shsu.edu/dpg006

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