The National Misery Index: How miserable are you…?

The economist Arthur Okun tried to answer this question back in the 1960’s by creating the National Misery Index. The value of the Misery index is calculated by adding the Unemployment rate to the Inflation rate. Okun chose these two variables because they are both economic phenomena that affect people negatively and the efforts to reduce one of them can result in the increase of the other. The current economic conditions make a lot of people curious on where we stand compared to the historical values of the National Misery Index. To find how miserable the Americans are today you can take a look at the chart below, generously provided by onlineschools.org.

 

Due to the low inflation rate, economists are trying to modify the Misery Index by replacing the inflation with the nation’s debt level. The rationale is that unmanageable debt and unemployment arguably leads to economic misery. Below, you can find alternative Misery Index graph that New York Times published a few months ago. People argue about the validity of this ranking as it puts the US between Jamaica and Island, but everyone should draw their own conclusions.