What is the world's most miserable country according to Steve Hanke’s Annual Misery Index?

Renowned economist Steve Hanke has recently released his Annual Misery Index also known as (HAMI) that judges countries based on their economic well-being. Here is what you need to know! 

What is Steve Hanke’s Annual Misery Index (HAMI)? 

The misery index is a measure of economic difficulties. It was earlier calculated by adding the unemployment rate and the inflation rate. The higher the misery index, the worse the economy is doing.

Economist Arthur Okun created the misery index in the 1970s. He was trying to find a way to measure the overall well-being of the American people. Okun believed that the unemployment rate and the inflation rate were two of the most important factors that affected people's lives.

Later, Harvard Professor Robert Barro later modified the index by adding the interest rate. And now, it was changed by Steve Hanke. 

He mentions “I further amended Barro’s version of the misery index by replacing the output gap with the growth rate of real GDP per capita and replacing the 30-year government bond yield with lending rates. After all, higher lending rates mean more expensive credit, and more borrowers’ misery.”

Steve Hanke’s latest misery index doubles the unemployment rate and on the basis of that the data is created. Steve states in his blog, “Oswald argued that the misery index shouldn’t be a simple sum of its elements, but that unemployment should carry a heavier weight. 

“He suggested doubling the unemployment rate. After reading Oswald’s paper, I concluded that Oswald was on to something, and have subsequently adopted his recommendation. So, for the first time, Hanke’s 2022 Annual Misery Index will double the unemployment-rate component.”

Which country is the Most Miserable? 

According to Steve Hanke’s report, Zimbabwe is the most miserable country in the world. The misery index for the country counts 414.7 due to high inflation.

Venezuela, Syria, Lebanon, and Sudan are all suffering from economic hardship. Inflation is the major cause of misery in Venezuela, Lebanon, and Sudan. On the other hand, Syria suffers from misery due to unemployment.

India comes at rank 103 with a misery index of 22.58. The major cause of India’s misery is unemployment. Here is the list of top 20 miserable countries according to HAMI:

According to the study, Switzerland takes the 157th spot with a misery index of just 8.518 making it the least miserable country. Steve states “One reason for that is the Swiss debt brake. 

“The debt brake has worked like a charm. Unlike most countries, Switzerland’s debt-to-GDP ratio has been on a downward trend in the last two decades, since it enshrined its debt brake into its constitution in a 2002 national referendum.”

The major challenge faced by Zimbabwe is due to its government ZANU-PF. Steve Hanke in his blog states “Indeed, ZANU-PF operates more like a political mafia than a political party. Its policies have resulted in massive misery.”

He has been tracking Zimbabwe’s economy since 2008 when Robert Mugabe was president.