THE EFFECT OF CONSUMER CONFIDENCE ON AGGREGATE HOUSEHOLD CONSUMPTION AND LEVERAGE

Consumer confidence measures and their effects on macroeconomic variables have been subject to extensive research since it was devised in the 1940s. Some empirical studies suggest that is one of leading causes fluctuations through its household consumption. Particularly, consumer durables spending borrowing are found be sensitive confidence. In this study, a stock-flow-consistent system dynamics model developed explain how affects aggregate behavior economy. The simulation results confirm strongly economy's dynamic behavior. It shown psychological structural parameters determine stability properties