Bank of Mexico

About: Bank of Mexico is a other organization based out in Mexico City, Mexico. It is known for research contribution in the topics: Monetary policy & Interest rate. The organization has 318 authors who have published 542 publications receiving 8452 citations. The organization is also known as: Banxico & BdeM.

Nudges for Privacy and Security: Understanding and Assisting Users’ Choices Online

Abstract: Advancements in information technology often task users with complex and consequential privacy and security decisions A growing body of research has investigated individuals’ choices in the presence of privacy and information security tradeoffs, the decision-making hurdles affecting those choices, and ways to mitigate such hurdles This article provides a multi-disciplinary assessment of the literature pertaining to privacy and security decision making It focuses on research on assisting individuals’ privacy and security choices with soft paternalistic interventions that nudge users toward more beneficial choices The article discusses potential benefits of those interventions, highlights their shortcomings, and identifies key ethical, design, and research challenges

The positive link between financial liberalization growth and crises

Abstract: There is no agreement regarding the growth-enhancing effects of financial liberalization, mainly because it is associated with risky international bank flows, lending booms, and crises. In this paper we make the case for liberalization despite the occurrence of crises. We show that in developing countries trade liberalization has typically been followed by financial liberalization, which has indeed led to financial fragility and a greater incidence of crises. However, financial liberalization also has led to higher GDP growth. In fact, the fastest-growing countries are typically those that have experienced boom-bust cycles. That is, there is a positive link between GDP growth and the bumpiness of credit, which is captured by the negative skewness --not by the variance-- of credit growth. To substantiate our interpretation of the data we present a model that shows why in countries with severe credit market imperfections, liberalization leads to higher growth and, as a by-product, to financial fragility. Thus, occasional crises need not forestall growth and may even be a necessary component of a developing country's growth experience. Finally, our analysis indicates that foreign direct investment does not obviate the need for risky international bank flows, as the latter are the only source of financing for most firms in the nontradables sector.

Disagreement and Biases in Inflation Expectations

Abstract: Empirical work documents substantial disagreement in inflation expectations obtained from survey data. Furthermore, the extent of such disagreement varies systematically over time in a way that reflects the level and variance of current inflation. This paper oers a simple explanation for these facts based on asymmetries in the forecasters’ costs of over- and under-predicting inflation. Our model implies biased forecasts with positive serial correlation in forecast errors and a cross-sectional dispersion that rises with the level and the variance of the inflation rate. It also implies that forecast errors at dierent horizons can be predicted through the spread between the short- and long-term variance of inflation. We find empirically that these patterns are present in inflation forecasts from the Survey of Professional Forecasters. A constant bias component, not explained by asymmetric loss and rational expectations, is required to explain the shift in the sign of the bias observed for a substantial portion of forecasters around 1982.