Misery index (economics)

The misery index (eng: misery index) is the sum of inflation and unemployment.

The misery index was introduced by Arthur Okun as an economic indicator in the scientific discussion. The assumption behind this is that both unemployment and inflation causes high economic and social costs.

Variants

Also, the Chicago economist Robert Barro has created a misery index. Meanwhile, published in the 70s Barro Misery Index consisted of additional economic growth and interest rates.

Some of the misery index is calculated with double-weighted unemployment. This is intended to reflect an appropriate value judgment that unemployment is worse than inflation. This view is reflected in the well-known quote from Helmut Schmidt: "Better 5 % inflation than 5 % unemployment". At the end of the term, however, Schmidt were both indicators at over 5%.

Criticism

From an economic standpoint, the misery index is neither accepted nor useful, but showed up in the past as a good indicator in elections. If the index is high, governments are voted out of office more often than is the case at low level.

Trivia

• An American grindcore band named Misery Index and deals in their songs with socially critical and political issues.