The misery index is an economic indicator, created by economist Arthur
Okun, and found by adding the unemployment rate to the inflation rate.
It is assumed that both a higher rate of unemployment and a worsening of
inflation create economic and social costs for a country.
Misery index - era by U.S president Variations on the Misery Index
Harvard Economist Robert Barro created what he dubbed the “Barro Misery Index”,
in 1999. The BMI takes the sum of the inflation and unemployment rates, and
adds to that the interest rate, plus the shortfall between the actual and trend
rate of GDP growth. In the late 2000s, Johns Hopkins
economist Steve Hanke built upon Barro’s misery index and began applying it to
countries beyond the United States. His modified misery index is the sum of the
interest, inflation, and unemployment rates, minus the year-over-year percent
change in per-capita GDP growth. Hanke has recently constructed a World
Table of Misery Index Scores by exclusively relying on data reported by
the Economist Intelligence Unit. This table includes a list of 89 countries,
ranked from worst to best, with data as of December 31, 2013.
In Mike Maloney's Hidden Secrets of Money bonus features for Episode 1,
Bonus Feature 1, Dave Morgan suggests that if you multiply the unemployment
rate times two and add it to the inflation rate, you will get chaos when
the sum of the two quantities is greater 50.
Political economists Jonathan Nitzan and Shimshon Bichler found a negative
correlation between a similar "stagflation index" and corporate
amalgamation in the United States since the 1930s. In their theory, stagflation
is a form of political economic sabotage employed by corporations to achieve
differential accumulation, in this case as an alternative to amalgamation when
merger and acquisition opportunities have run out.
Criticism A 2001 paper looking at large-scale
surveys in Europe and the United States concluded that unemployment more heavily
influences unhappiness than inflation. This implies that the basic misery index
underweights the unhappiness attributable to the unemployment rate:
"the estimates suggest that people would trade off a 1-percentage-point increase
in the unemployment rate for a 1.7-percentage-point increase in the
inflation rate." Misery and crime
Some economists posit that the components of the Misery Index drive the
crime rate to a degree. Using data from 1960 to 2005, they have found that the
Misery Index and the crime rate correlate strongly and that the Misery
Index seems to lead the crime rate by a year or so. In fact, the correlation is
so strong that the two can be said to be cointegrated, and stronger than
correlation with either the unemployment rate or inflation rate alone.
Data sources The data for the misery index is
obtained from unemployment data published by the U.S. Department of
Labor and the Inflation Rate from the Bureau of Labor Statistics. The exact
methods used for measuring unemployment and inflation have changed over time,
although past data is usually normalized so that past and future metrics are
comparable. References
^ The US Misery Index ^ "US Misery Index by President".
n-vs-dot-clinton-whos-the-economic-champ http:www.cato.orgcommentary/misery-mena
commentary/measuring-misery-around-world ^ Capital as Power: A Study of Order and
Creorder Nitzan and Bichler, 2009: pp. 384-386
^ Di Tella, Rafael; MacCulloch, Robert J. and Oswald, Andrew, "Preferences over
Inflation and Unemployment: Evidence from Surveys of Happiness", American
Economic Review, 91(1), pp335-341. p340 eas.repec.orgeeev102y2009i2p112-115.html
New evidence from the misery index in the crime function, Tang, Chor Foon
Lean, Hooi Hooi External links
The current and historical Misery Index The Misery Index by President
The Misery Index By Year Cato Publications Commentary