Misery Index

Misery IndexThe misery index was created by economist Arthur Okun during the 1960’s at a time when the index was at historically low levels. The misery index is a combination of two simple factors that makes life difficult for the average citizen. These are inflation and unemployment.  High levels of price inflation (rapidly rising prices) will cause households to have difficulty affording the basic necessities while high unemployment will leave a high percentage of households without any income at all. High combined levels will cause havoc throughout the economy and a high level of distress, discomfort and political unrest.

InflationData has published an interesting chart of the Misery Index which includes the inflation rate, the unemployment rate, the misery index and the political party responsible. This chart is very informative in that you can see a lot of information in a very succinct way. See: InflationData’s Misery Index.