Definition of Misery index:
An informal measure of the state of an economy generated by adding together its rate of inflation and its rate of unemployment.
The first misery index was created by economist Arthur Okun, who served as second chairman of President Lyndon B. Johnson’s Council of Economic Advisors and a professor at Yale. Okun’s misery index used the simple sum of the nation’s annual inflation rate and unemployment rate to provide President Johnson with an easily understood snapshot of the economy’s relative health. The higher the index, the greater the misery felt by the average voter. During the 1976 campaign for U.S. president, candidate Jimmy Carter popularized Okun’s misery index as a means of criticizing his opponent, incumbent Gerald Ford. By the end of Ford’s administration, the misery index was a relatively high 12.7%, creating a tempting target for Carter. During the 1980 presidential campaign, Ronald Reagan pointed out that the misery index had increased under Carter.
Equal to the sum of the inflation rate and the unemployment rate, the original misery index was popularized in the 1970s as a measure of America’s economic health during a president’s term in office.
That combines inflation rate and unemployment rate, and is used as an indicator of consumer confidence.
How to use Misery index in a sentence?
- The first misery index was created by Arthur Okun and was equal to the sum of inflation and unemployment rate figures to provide a snapshot of the US economy.
- By the end of the decade the misery index was at a record high.
- In recent times, variations of the original misery index have become popular as a means to gauge the overall health of the global economy.
- It has broadened in recent times to include other economic indicators, such as bank lending rates.
- The higher the index, the more is the misery felt by average citizens.
Meaning of Misery index & Misery index Definition