ALLIED SOCIAL SCIENCE ASSOCIATIONS JANUARY 3-5, 2014, PHILADELPHIA, PA 1 Consumer Confidence in A DSGE Model for Turkey Pınar Deniz * Erhan Aslanoğlu † Abstract In this study, it is argued that agents, separate from the observable economic indicators, carry current and/or future time information about the economy, and that this information is already present in consumer confidence index (CCI). Moreover, it is argued that as well as consumers, this information is utilized by producers who have entrepreneurial sentiments. Producers are divided as large scale enterprises (LSEs) and small and medium scale enterprises (SMEs). SMEs are assumed to reach this entrepreneurial information (animal spirits) in the economy, but LSEs do not either because they want to stick to their business plan or they cannot due to their rigid structure. A standard small scale New Keynesian DSGE model for Turkey for the period of 2006-2012 is constructed incorporating CCI and information component. The responses of economic fundamentals to monetary policy, information and technology shocks are examined. Keywords: New Keynesian DSGE, Monetary Policy, Consumer Confidence Index Jel Classification: D84, E47, E52. * Marmara University, EU Institute. E-mail: pinar.deniz@marmara.edu.tr . Ongoing dissertation. † Piri Reis University, Department of Economics and Finance, E-mail: easlanoglu@pirireis.edu.tr