The buying euphoria is the sentiment that is generated in investors after the accumulation of good economic news at the microeconomic and macroeconomic levels.
Investors feel confident that the market will rise and that economic conditions will improve. The sentiment is seen in the street, people consume, spend and businesses work well.
The expansion in credit is visible, the most important sectors of the economy grow, promote development and investment, the unemployment rate decreases and employment is generated thanks to a sustainable growth of the country’s gross domestic product (GDP) . This very positive climate has a contagious effect on consumers as if it were a kind of shopping euphoria.
The buying euphoria encourages the entrepreneur to establish new businesses and attracts capital and foreign direct investment, therefore, all the variables converge in a positive way. Like any positive effect, another negative path follows that will depend on the ability of an economy to maintain the level of spending and consumption, in addition to its ability to export .
Shopper Euphoria: Negative Effects If Left Unchecked
The buying euphoria is an ideal situation for any country but it must be taken into account that it can generate significant inflation if it is not known to control. This effect can have negative effects on the economy, therefore, the large Central Banks of the world have monetary policy objectives based on price stability and job creation because they are two of the most important variables that determine the smooth operation of an economy.
The great financial crises of the past have shown that financial risks have to be controlled at all levels, including uncontrolled credit expansion that can precisely cause an uncontrollable level of buyer euphoria without encouraging savings .
We must bear in mind that saving to a certain extent is essential for the survival of families and for the conscience of people because there cannot always be an unusual consumption path that induces the use of credit cards that become a unsustainable debt that can create a bubble and a liquidity crisis. Therefore, the cultural model oriented to the economy must be oriented to a balance between consumption and savings of people that allow generating a high degree of awareness, maturity and responsibility in people.