Misery index (economics) Totally Explained

Everything about Misery Index Economics totally explained

ť For the American death metal band, see Misery Index (band).

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 both create economic and social costs for a country. It is often incorrectly attributed to Chicago economist Robert Barro in the 1970s, due to the Barro Misery Index that additionally includes GDP and the bank rate.
During the Presidential campaign of 1976, Democratic candidate, Jimmy Carter, made frequent references to the Misery Index, which by the summer of 1976 was at 13.57%. Carter stated that no man responsible for giving a country a misery index that high, had a right to even ask to be President. Carter won the 1976 election. However, by 1980, when President Carter was running for re-election against Ronald Reagan, the Misery Index had reached an all-time high of 21.98%. Carter lost the election to Reagan.

U.S. misery index

Misery index - era by U.S president

Index = Unemployment rate >

Rank	President	Time Period	Index Average	Low	High
5	Harry Truman	1948–1952	7.87	Dec 1952 = 3.45	Jan 1948 = 13.63
1	Dwight D. Eisenhower	1953–1960	6.26	Jul 1953 = 2.97	Apr 1958 = 10.98
3	John F. Kennedy	1961–1962	7.27	Jul 1962 = 6.40	Jul 1961 = 8.38
2	Lyndon B. Johnson	1963–1968	6.78	Nov 1965 = 5.70	Jul 1968 = 8.19
7	Richard Nixon	1969–1973	9.98	Jan 1968 = 7.80	Dec 1973 = 13.61
10	Gerald Ford	1974–1976	15.93	Dec 1976 = 12.66	Jan 1975 = 19.90
11	Jimmy Carter	1977–1980	16.27	Apr 1978 = 12.60	Jun 1980 = 21.98
9	Ronald Reagan	1981–1988	12.19	Dec 1986 = 7.70	Sep 1981 = 19.33
8	George H. W. Bush	1989–1992	10.68	Sep 1989 = 9.64	Nov 1990 = 12.47
4	Bill Clinton	1993–2000	7.80	Apr 1998 = 5.74	Jan 1993 = 10.56
6	George W. Bush	2001 - Mar 2008	8.01	Oct 2006 = 5.71	Sep 2005 = 9.79

Misery and crime

Some economists posit that the components of the Misery Index drive the crime rate to a degree. 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.

Data sources

The data for the misery index is obtained from unemployment data obtained from the U.S. Department of Labor and Inflation Rate from Financial Trend Forecaster

. The exact methods used for measuring unemployment and inflation have changed over time.

Related indexes

The Despondency Index, developed by the Bureau of Inverse Technology, correlates, in real time, the suicide raite measured with the Suicide Box at the Golden Gate Bridge, to the Dow Jones Industrial Average.

Further Information

Get more info on 'Misery Index Economics'.

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