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

Ruprah, Inder J.; Luengas, Pavel

doi:10.1016/j.socec.2010.08.001

Cited by 20 publications

(11 citation statements)

References 13 publications

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“…Therefore, both the total cost of unemployment and the inflation/unemployment ratio need to include the individual cost of becoming unemployed γ (see also Di Tella, MacCulloch, and Oswald ). Previous studies have found that both inflation and unemployment decrease life satisfaction in OECD countries and Latin America; however, there is less agreement about the size of the marginal rate of substitution (Ruprah and Luengas ). We will return to this in Section .…”

Section: Welfare Losses Associated With Inflation and Unemploymentmentioning

confidence: 89%

The Happiness Trade‐Off between Unemployment and Inflation

Blanchflower¹,

Bell²,

Montagnoli³

et al. 2014

J of Money Credit Banking

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Unemployment and inflation lower well‐being. The macroeconomist Arthur Okun characterized the negative effects of unemployment and inflation by the misery index—the sum of the unemployment and inflation rates. This paper makes use of a large European data set, covering the period 1975–2013, to estimate happiness equations in which an individual subjective measure of life satisfaction is regressed against unemployment and inflation rate (controlling for personal characteristics, country, and year fixed effects). We find, conventionally, that both higher unemployment and higher inflation lower well‐being. We also discover that unemployment depresses well‐being more than inflation. We characterize this well‐being trade‐off between unemployment and inflation using what we describe as the misery ratio. Our estimates with European data imply that a 1 percentage point increase in the unemployment rate lowers well‐being by more than five times as much as a 1 percentage point increase in the inflation rate.

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Section: Welfare Losses Associated With Inflation and Unemploymentmentioning

confidence: 89%

The Happiness Trade‐Off between Unemployment and Inflation

Blanchflower¹,

Bell²,

Montagnoli³

et al. 2014

J of Money Credit Banking

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“…Therefore, unemployment and inflation are negatively related to consumer life satisfaction. Utilizing a Latin American dataset on life satisfaction, Ruprah and Luengas [30] found that the unemployment rate and inflation would reduce consumer life satisfaction. In addition, using data for 2001 to 2011, Abounoori et al [31] investigated the impact of the unemployment rate and inflation on life satisfaction of European Union countries and Iran, and they concluded that the unemployment rate and inflation had a significant negative impact on life satisfaction, and the negative effect from unemployment was much higher than that of inflation.…”

Section: Previous Research On Consumer Life Satisfactionmentioning

confidence: 99%

Sustainable Financial Education and Consumer Life Satisfaction

Chen

Wang

et al. 2020

Sustainability

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Sustainable financial education is defined as the continuous input of money and time on financial knowledge education after formal schooling. The purpose of this paper is to examine the impact of sustainable financial education on consumer life satisfaction. Utilizing the dataset of Household Consumer Finance of Chinese Urban Residents in 2012 by the China Financial Research Center of Tsinghua University, the variable of sustainable financial education is constructed through the variables of the necessity of financial education, the money spent on financial education, and the time spent on financial education. To improve the estimation results, order probit regression is utilized. The results indicate that financial education is significantly positive to consumer life satisfaction only for a consumer with higher education. Consumers who regard financial education to be of high necessity will feel more satisfied. The results also show that consumers who spend more money and time on financial education after formal schooling will be more satisfied. Moreover, the sustainable impacts of financial education on consumer life satisfaction are verified. In addition, this study provides empirical evidence that suggests that sustainable financial education positively contributes to consumer life satisfaction. The results have implications for policymakers to take measures in enhancing sustainable financial education to improve consumer life satisfaction.

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“…Inflation and unemployment shall cause a reduction in the level of individual welfare as it deteriorates the real money value; thus, it must be controlled to stabilize the economy. Bhattarai (2016) and Ruprah & Luengas (2011) found that inflation and unemployment had reduced the well-being and the level of happiness ranging from 1 to 8 points in Latin American countries and it doubled in the Organization for Economic Co-operation and Development (OECD) countries. Inflation has also affected the level of welfare and unemployment between age groups and the characteristics of the labour market.…”

Section: Introductionmentioning

confidence: 99%

Inflation-Unemployment Trade-Offs In ASEAN-10

2020

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This study empirically explores the nature of inflation-unemployment dynamic causal relationships both in the short and long-run in the ASEAN-10 over the 1989-2018 period. Based on the panel cointegration test, the study documented a long-run equilibrium between inflation and unemployment. Using the Vector Error Correction Model (VECM) analysis, the study found an insignificant inflation-unemployment relationship in the short-run. However, in the long-run, inflation is found to affect the unemployment rate positively. Our results from the Variance Decompositions (VDCs) analysis also supported these findings, where the unemployment responded at the more significant percentage to shocks in inflation compared to the response of inflation to shocks in unemployment. These findings only supported the relevance of the Phillips curve theory in the long-run. Overall, these findings imply that although inflation targeting policy is not relevant to the short-run, it becomes crucial and effective to reduce the unemployment rate in ASEAN-10 in the long-run.JEL Classifications: E52, E58, J64 How to Cite:Lisani, N., Masbar, R., & Silvia, V. (2020). Inflation-Unemployment Trade-Offs In Asean-10. Signifikan: Jurnal Ilmu Ekonomi, 9(2), 241-256. https://doi.org/10.15408/sjie.v9i2.16346.

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

Cited by 20 publications

References 13 publications

The Happiness Trade‐Off between Unemployment and Inflation

The Happiness Trade‐Off between Unemployment and Inflation

Sustainable Financial Education and Consumer Life Satisfaction

Inflation-Unemployment Trade-Offs In ASEAN-10

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