Chart of the Day: Modern Misery Index Falls to Pre-Recession Lows
Back in the 1960s, when inflation was soaring while unemployment remained stubbornly high, Arthur Okun invented the “misery index”—the sum of inflation plus unemployment. As inflation came under control after the early 1980s, we stopped hearing much about the misery index.
In truth, the misery index is not a bad concept as a rough indicator of the health of the economy. It needs one update, however. In Okun’s day, it never occurred to anyone that inflation could be too low. Now, as the experience of Japan, the Eurozone, and to some extent, even the US shows us, deflation can be as much of a threat as inflation.
The Fed recognizes the danger of deflation by setting its inflation target of +2 percent, not at zero. Why not use this target to modernize the misery index? I suggest a “modern misery index” that is equal to the unemployment rate plus the absolute value of the difference between the current inflation rate and the Fed’s 2 percent target.
Suppose unemployment is 5 percent. By Okun’s old formula, inflation of 3.5 percent would give you a misery index of 8.5, but inflation of 0.5 would give you an index of just 3.5. By modern reasoning, an inflation rate that is a point and a half below the 2 percent target is just as much a source of alarm as one that is a point an a half above, so my modern misery index gives you 5 + 1.5 = 6.5 in both cases.
Here then, is what the modern misery index looks like over the past half-century:
Source: http://dolanecon.blogspot.com/2017/01/chart-of-day-modern-misery-index-falls.html
Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.
"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.
Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world. Anyone can join. Anyone can contribute. Anyone can become informed about their world. "United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.
LION'S MANE PRODUCT
Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules
Mushrooms are having a moment. One fabulous fungus in particular, lion’s mane, may help improve memory, depression and anxiety symptoms. They are also an excellent source of nutrients that show promise as a therapy for dementia, and other neurodegenerative diseases. If you’re living with anxiety or depression, you may be curious about all the therapy options out there — including the natural ones.Our Lion’s Mane WHOLE MIND Nootropic Blend has been formulated to utilize the potency of Lion’s mane but also include the benefits of four other Highly Beneficial Mushrooms. Synergistically, they work together to Build your health through improving cognitive function and immunity regardless of your age. Our Nootropic not only improves your Cognitive Function and Activates your Immune System, but it benefits growth of Essential Gut Flora, further enhancing your Vitality.
Our Formula includes: Lion’s Mane Mushrooms which Increase Brain Power through nerve growth, lessen anxiety, reduce depression, and improve concentration. Its an excellent adaptogen, promotes sleep and improves immunity. Shiitake Mushrooms which Fight cancer cells and infectious disease, boost the immune system, promotes brain function, and serves as a source of B vitamins. Maitake Mushrooms which regulate blood sugar levels of diabetics, reduce hypertension and boosts the immune system. Reishi Mushrooms which Fight inflammation, liver disease, fatigue, tumor growth and cancer. They Improve skin disorders and soothes digestive problems, stomach ulcers and leaky gut syndrome. Chaga Mushrooms which have anti-aging effects, boost immune function, improve stamina and athletic performance, even act as a natural aphrodisiac, fighting diabetes and improving liver function. Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules Today. Be 100% Satisfied or Receive a Full Money Back Guarantee. Order Yours Today by Following This Link.
