Misery index (economics)

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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.^[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.

Contents 1 U.S. misery index 1.1 Misery index - era by U.S president 2 Misery and crime 3 Data sources 4 Related indexes 5 References 6 External links

[edit] U.S. misery index

[edit] Misery index - era by U.S president

Index = Unemployment rate + Inflation rate

Rank	President	Time Period	Index Average	Low	High
5	Harry Truman	1948–1952	7.88	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	7.14	Jul 1962 = 6.40	Jul 1961 = 8.38
2	Lyndon B. Johnson	1963–1968	6.77	Nov 1965 = 5.70	Jul 1968 = 8.19
7	Richard Nixon	1969–1973	10.57	Jan 1968 = 7.80	Dec 1973 = 13.61
10	Gerald Ford	1974–1976	14.93	Dec 1976 = 12.66	Jan 1975 = 19.90
11	Jimmy Carter	1977–1980	20.27	Apr 1978 = 12.60	Jun 1980 = 21.98
9	Ronald Reagan	1981–1988	11.19	Dec 1986 = 7.70	Sep 1981 = 19.33
8	George H. W. Bush	1989–1992	9.68	Sep 1989 = 9.64	Nov 1990 = 12.47
4	Bill Clinton	1993–2000	8.80	Apr 1998 = 5.74	Jan 1993 = 10.56
6	George W. Bush	2001 - 2008	8.10	Oct 2006 = 5.71	Aug 2008 = 11.47

^[3]

[edit] 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.^{[citation needed]}

[edit] 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 Financial Trend Forecaster. 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.

[edit] 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.

[edit] References

1. ^ The US Misery Index
2. ^ "REAGAN VS. CLINTON: WHO'S THE ECONOMIC CHAMP?", Robert J. Barro
3. ^ "US Misery Index by President". http://www.miseryindex.us/indexbypresident.asp. 

[edit] External links

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