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MENTAL MODEL · M6075

Misery Index

Misery Index
BusinessHigh supportMacroeconomics
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Version 1.0.0 · Updated 2026-07-28

CORE DEFINITION

The Misery Index is a macroeconomic indicator published by Arthur Okun in the 1970s, representing unpleasant economic conditions, equal to the sum of inflation and unemployment rates. Its formula is: Misery Index = Inflation Rate + Unemployment Rate, indicating that the general public feels the same degree of discomfort from equal increases in inflation and unemployment. Modern economists disagree with describing the negative impact of inflation mechanisms with the completely negative term "misery." In fact, many economists believe that the public's prejudice against moderate inflation stems from its interaction: people only remember the economic difficulties associated with periods of high inflation. From the perspective of modern economists, moderate inflation is a less important economic problem and can be partially mitigated by combating stagflation (possibly stimulated by monetarism).

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The Misery Index is a macroeconomic indicator published by Arthur Okun in the 1970s, representing unpleasant economic conditions, equal to the sum of inflation and unemployment rates. Its formula is: Misery Index = Inflation Rate + Unemployment Rate, indicating that the general public feels the same degree of discomfort from equal increases in inflation and unemployment. Modern economists disagree with describing the negative impact of inflation mechanisms with the completely negative term "misery."

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A macroeconomic misery indicator obtained by adding the inflation rate and the unemployment rate, reflecting the overall economic pressure on the public.

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Source support: Explicit

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