In countries with substantial agricultural sectors, such as Mexico, extreme weather conditions linked to the El Niño-Southern Oscillation (ENSO) wield significant influence. This study focuses on Mexico, examining how ENSO affects the interplay between headline inflation (excluding energy) and economic activity. Employing a nonlinear local projection within two weather scenarios – acute and neutral – we uncover a notable disparity in inflationary dynamics. Notably, amidst acute weather conditions, a 1% shock in the output gap triggers a cumulative inflationary effect (over a 12-month horizon) 0.90% higher than under neutral environmental states. This discrepancy deviates inflation from Mexico’s Central Bank target because of supply constraints and demand pressures which mainly affect agricultural inflation. The results emphasize the urgency of incorporating environmental factors into inflation risk assessment for more informed monetary policy decisions. Additionally, this approach aids in isolating environmental influences from other inflation drivers.

中文翻译：

---

不同天气条件下的通货膨胀动态：来自墨西哥的证据

在墨西哥等拥有大量农业部门的国家，与厄尔尼诺南方涛动（ENSO）相关的极端天气条件会产生重大影响。本研究重点关注墨西哥，研究 ENSO 如何影响总体通胀（不包括能源）和经济活动之间的相互作用。在两种天气情景（急性和中性）中采用非线性局部预测，我们发现通货膨胀动态存在显着差异。值得注意的是，在恶劣的天气条件下，产出缺口 1% 的冲击会引发累积通胀效应（12 个月内），比中性环境状态下高 0.90%。由于供给限制和需求压力主要影响农业通胀，这种差异使得通胀偏离了墨西哥央行的目标。结果强调了将环境因素纳入通胀风险评估以做出更明智的货币政策决策的紧迫性。此外，这种方法有助于将环境影响与其他通胀驱动因素隔离开来。