Inflation targeting and the consistency of monetary policy decisions in Mexico: an empirical analysis with discrete choice models

This paper examines the nature of monetary policy decisions in Mexico using discrete choice models applied to the Central Bank's explicit monetary policy instrument. We find that monetary policy adjustments in Mexico have been strongly consistent with the CB's inflation targeting strategy. We also find evidence that monetary policy responds in a forward-looking manner to deviations of inflation from the target and that observed policy adjustments exhibit asymmetric features, with stronger responses to positive than to negative deviations of inflation from the target and a greater likelihood of policy persistence during periods when monetary policy is tightened, compared with periods when policy is loosened.

Does Daily Sunshine make you Happy? Subjective Measures of Well-being and the Weather

This paper examines to what extent individual measures of well-being are correlated with daily weather patterns in the United Kingdom. Merging daily weather data with data from the British Household Panel Survey (BHPS) allows us to test whether measures of well-being are correlated with temperature, sunshine, rainfall and wind speed. We are able to make a strong case for causality due to ‘randomness’ of weather in addition to using regression methods that eliminate time-invariant individual level heterogeneity. Results suggest that some weather parameters (such as sunshine) are correlated with some measures of well-being (job satisfaction); however, in general the effect of weather on subjective measures of well-being is very small.