Hanke’s Annual Misery Index: The World’s Saddest (And Happiest) Countries

The human condition inhabits a vast continuum between "miserable" and "happy." In the sphere of economics, misery tends to flow from high inflation, steep borrowing costs and unemployment. The most surefire way to mitigate that misery: economic growth. All else equal, happiness tends to blossom when growth is strong, inflation and interest rates low, and jobs plentiful.


Many countries measure and report these economic metrics on a regular basis. Comparing them, nation by nation, can tell us a lot about where in the world people are sad or happy.


Would you consider the United States to be more or less miserable than other countries? To answer this question, I update my annual Misery Index measurements.


The first Misery Index was constructed by economist Art Okun in the 1960s as a way to provide President Lyndon Johnson with an easily digestible snapshot of the economy. That original Misery Index was just a simple sum of a nation’s annual inflation rate and its unemployment rate. The Index has been modified several times, first by Robert Barro of Harvard and then by myself.



My modified Misery Index is the sum of the unemployment, inflation, and bank lending rates, minus the percentage change in real GDP per capita. Higher readings on the first three elements are “bad” and make people more miserable. These are offset by a “good” (GDP per capita growth), which is subtracted from the sum of the “bads.” A higher Misery Index score reflects a higher level of “misery,” and it’s a simple enough metric that a busy president, without time for extensive economic briefings, can understand at a glance.


In the accompanying gallery, you can find Misery Index rankings for the 98 nations that report relevant data on a timely basis. For consistency and comparability, all data come from the Economist Intelligence Unit.


Let’s start with the most miserable country and work toward the happiest. Flip it around and you have a Happiness Index.


Venezuela holds the inglorious tile of the most miserable country in 2017, as it did in both 2016 and 2015. The failures of President Nicolas Maduro's socialist, corrupt petroleum state have been well documented over the past year, including by my measurements of Venezuela’s hyperinflation. Not only is Venezuela the most miserable country in the world, but its Misery Index score has dramatically increased since 2016.


Syria holds down the rank of second most miserable, and the reason isn’t hard to uncover. Indeed, Syria has now been in the grip of a brutal civil war for almost seven years. Need I say more.

remains in the number three spot for the second year in a row. As my close friend—the famous Brazilian economist, diplomat and politician, the late Roberto Campos—once explained to me during a visit to Brazília: the Brazilian Constitution is as thick as the New York City telephone book and is full of little more than rights and entitlements. President Temer has attempted to turn back the tide of government obligations. But, to date, his attempts to rein in the country’s biggest unfunded liability—the pension system—have come to naught. The bankrupt pension system is, of course, not the only problem facing Brazil. Corruption, for example, remains an endemic problem.


Argentina has improved its ranking (and index score) in 2017, moving from second to fourth most miserable country in the world. But, until inflation is wrestled to the ground, President Macri will struggle—as President Menem did until April 1, 1991, when he introduced Argentina’s Convertibility System, which linked the peso to the greenback.


Egypt ranked fifth most miserable, a notch lower than in 2016. But, Egypt’s Misery Index score actually increased—a bad sign. President el-Sissi’s military-socialist rule continues to deliver misery. In addition to the problems that accompany any socialist-type system in which the military plays a decisive role, the Egyptian pound remains the country’s Achilles’ heel. The only solution to this problem is the adoption of a currency board, in which the pound would become a clone of an anchor currency, such as the euro or U.S. dollar.


Let’s move to the other end of the table—the end where the least miserable countries reside. It is there that we find China ruling the roost as the world’s “happiest” country. Chairman Xi has some bragging rights here, and in the World’s soft power sphere, these are valuable.


Now for the United States, its Misery Index score has improved a bit, moving from 9.4 in 2016 to 8.2 in 2017. Yet, as far as happiness is concerned, it is not America first but America thirtieth—trailing behind 29 other countries on the happiness train.


This piece was originally published on Forbes. 
Authored by Steve H. Hanke of the Johns Hopkins University

Past Blogs

Measuring Venezuela’s hyperinflation

March 02, 2018

In a lecture delivered at the Institute of Civil Engineers on May 3, 1883, Lord Kelvin had this to say about measurement: “I often say that when you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely, in your thoughts, advanced to the stage of science...

more »

Venezuela's Inflation Rate Continues To Float Above 6000%

February 13, 2018

The Grim Reaper has taken his scythe to the Venezuelan bolivar. The death of the bolivar is depicted in the following chart. On the black market (read: free market), a bolivar is worthless, and with its collapse, Venezuela is witnessing today the world’s worst inflation. On January 29th, Venezuela announced that one of its two official exchange rates was being eliminated. So, now the bolivar “trades” at one rate, under new auction rules. The official rate is now B/USD = 24,968, for those lucky enough to obtain it. But for most, the black market (read: free market) is where bolivar-dollar exchanges take place, and where rate is 236,854 (02/13/2018).

more »

Long Live The Lev: Bulgaria Should Hold On To Its Currency Board

February 08, 2018

After Bulgaria took the exit from Communism in 1990, Bulgarians encountered some potholes. The economy plunged, there were debt defaults, and that Balkan paradise experienced hyperinflation, peaking at an astounding 242% per month in February 1997. Yes, that’s per month.

more »

Privatize Federal Grazing Lands: A Message From Reagan, Laxalt And Hanke

February 06, 2018

On Jan. 8, Judge Gloria M. Navarro of the Federal District Court in Las Vegas dismissed charges against Cliven Bundy and his sons Ammon and Ryan, as well as a supporter Ryan W. Payne. The case stemmed from a 2014 armed standoff at the Bundy ranch in Bunkerville, Nevada. The standoff arose over a dispute about government grazing fees, pitting the Bundys against federal officials.

more »

U.S. Treasury Secretary Mnuchin: Clueless On Exchange Rates

January 30, 2018

On Jan. 23, U.S. Treasury Secretary Steven Mnuchin said that a “weaker dollar is good for trade.” On that, the greenback promptly made a three-year low. He uttered those remarks while addressing the annual gathering of the World Economic Forum in Davos, Switzerland, of all places. The Swiss must have been amused to witness such a clueless remark by no less than a U.S. Treasury Secretary.

more »