In this article, we extend the traditional GARCH(1,1) model by including a functional trend term in the conditional volatility of a time series. We derive the main properties of the model and apply it to all agricultural commodities in the Mexican CPI basket, as well as to the international prices of maize, wheat, swine, poultry, and beef products for three different time periods that implied changes in price regulations and behavior: before the North American Free Trade Agreement (NAFTA; 1987-1993 ), post-NAFTA (1994 -2005, and commodity supercycle (2006)(2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014). The proposed model seems to adequately fit the volatility process and, according to heteroscedasticity tests, also outperforms the ARCH(1) and GARCH(1,1) models, some of the most popular approaches used in the literature to analyze price volatility. Our results show that, consistent with anecdotal evidence, price volatility trends increased from the period

La serie de Documentos de Investigación del Banco de México divulga resultados preliminares de trabajos de investigación económica realizados en el Banco de México con la finalidad de propiciar el intercambio y debate de ideas. El contenido de los Documentos de Investigación, así como las conclusiones que de ellos se derivan, son responsabilidad exclusiva de los autores y no reflejan necesariamente las del Banco de México.The Working Papers series of Banco de México disseminates preliminary results of economic research conducted at Banco de México in order to promote the exchange and debate of ideas. The views and conclusions presented in the Working Papers are exclusively the responsibility of the authors and do not necessarily reflect those of Banco de México.

How do informal transfers affect work incentives? The question matters in developing countries, where labor markets are intertwined with transfer networks. The tax-and-subsidy component of transfers would dilute work incentives, but their pro-social element could encourage people to work harder. Such crosscurrents are hard to disentangle because participation in informal networks is likely endogenous. We tackle this problem with a lab-in-the-field experiment that uses a real-effort task. Our main finding is that participants do not reduce their effort in the presence of transfers. This suggests that the impact of informal transfers may extend beyond just the sharing of risk.

This article explores the aggregate effects of women's empowerment on intra-and intertemporal household choices within a Bewley-style heterogeneous agent framework to aggregate household level decisions into macroeconomic variables. Emphasis is placed on the role of attitudes towards risk and subsistence consumption. In this context, we find that as women get more empowered, we assume that households show a higher risk aversion reflecting the more risk adverse women's preferences. Thus, households heighten self-insurance by increasing precautionary savings for smoothing consumption and, in turn, this higher level of savings tends to reduce wealth inequality. Also, regardless of income, women's preferences increase food intake in households as women get empowered. The model is calibrated with the 2014 National Survey of Household Income and Expenditures of Mexico.

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