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.^[1] 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.^[2]

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

However, due to changes in calculating inflation in 1982 and 1996, and changes in calculation of unemployment, these numbers are not comparable across years.

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 rate measured with the Suicide Box at the Golden Gate Bridge, to the Dow Jones Industrial Average.

References

1. ↑ The US Misery Index
2. ↑ "REAGAN VS. CLINTON: WHO'S THE ECONOMIC CHAMP?", Robert J. Barro

External links

• The current and historical Misery Index
• PBS.org Teachers Guide: Jimmy Carter and the Misery Index

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