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Monetary policy and happiness: Preferences over inflation and unemployment in Latin America

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  • Ruprah, Inder J.
  • Luengas, Pavel

Abstract

Using subjective well-being survey data for Latin America, we present evidence that both inflation and unemployment reduce well-being; where the cost of inflation in terms of unemployment, hence the relative size of the weights in a social well-being functions, is about one to eight, almost double of that found for OECD countries. The trade-off, and therefore the misery index, differs across subgroups. For example, the young and left-leaning citizens are more concerned with unemployment than inflation.

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  • Ruprah, Inder J. & Luengas, Pavel, 2011. "Monetary policy and happiness: Preferences over inflation and unemployment in Latin America," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(1), pages 59-66, February.
    • Handle: RePEc:eee:soceco:v:40:y:2011:i:1:p:59-66
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    2. van Hoorn, André, 2018. "Is the happiness approach to measuring preferences valid?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 73(C), pages 53-65.
    3. Hassan Afrouzi & Alexander Dietrich & Kristian Myrseth & Romanos Priftis & Raphael Schoenle, 2024. "Inflation Preferences," NBER Working Papers 32379, National Bureau of Economic Research, Inc.
    4. Thomas Wai-Kee Yuen & Winnie Wan-Ling Chu, 2015. "Happiness in ASEAN member states," International Journal of Happiness and Development, Inderscience Enterprises Ltd, vol. 2(1), pages 69-83.
    5. Elissa Braunstein, 2013. "Central bank policy and gender," Chapters, in: Deborah M. Figart & Tonia L. Warnecke (ed.), Handbook of Research on Gender and Economic Life, chapter 21, pages 345-358, Edward Elgar Publishing.
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    7. Hassan Gholipour Fereidouni & Youhanna Najdi & Reza Ekhtiari Amiri, 2013. "Do governance factors matter for happiness in the MENA region?," International Journal of Social Economics, Emerald Group Publishing, vol. 40(12), pages 1028 - 1040, November.
    8. David G. Blanchflower & David N.F. Bell & Alberto Montagnoli & Mirko Moro, 2014. "The Happiness Trade‐Off between Unemployment and Inflation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 46(S2), pages 117-141, October.
    9. Ha Trong Nguyen & Alan Duncan, 2015. "Macroeconomic Fluctuations in Home Countries and Immigrants’ Wellbeing: New Evidence from Down Under," Bankwest Curtin Economics Centre Working Paper series WP1502, Bankwest Curtin Economics Centre (BCEC), Curtin Business School.
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