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World economy

Feeling the heat. Growing Misery (Index) in the BRICS countries

A research by Stefano Fugazzi on behalf of ABC Economics – The Misery Index is a measure of economic well-being for a specified economy. An increasing index means a worsening economic climate for the economy in question, and vice versa.brics

The author of this paper was one of the first commentators to monitor the Misery Index in Italy (please refer to Stefano Fugazzi’s paper published in November 2012: “Italia, l’austerità mette le ali al Misery Index”) even before Confcommercio began to track it (March 2013,“Confcommercio introduces the Misery index, will be used to measure the new poverty crisis”).

ABC Economics subsequently updated the Misery Index metric in May 2014 (based on the Q1 2014 data: “Italia, il boom del Misery Index negli anni post introduzione dell’euro”) and in January 2015 (based on Q4 2014 data: “ABC Economics Research: il Misery Index italiano dal 2002”). Additionally, a comprehensive review of the Eurozone’s Misery Index was detailed in Stefano Fugazzi’s ABC Economipedia, a book now available both in paperback and eBook formats.

With the growing concerns over the health of the Chinese economy, ABC Economics took the initiative to track how the original Misery Index (and its variations – namely the Growth Misery Index and the Super Misery Index) has moved in the BRICS economies (Brazil, Russia, India, China and South Africa) since the year 2000.

Data was sourced from the International Monetary Fund (IMF) database. Our analysis does not include India as the IMF database presents a number of gaps; hence our reference to the acronym “BR(I)CS” as opposed to “BRICS”.


Standard Misery Index

The starting point is the original formulation of the indicator (which we shall call “Standard Misery Index”) found by adding unemployment rate to inflation rate. It is assumed that both a higher rate of unemployment and a worsening of inflation create economic and social costs for a country.

Standard Misery Index = unemployment rate + inflation rate

Growth Misery Index

In 1999 Harvard Economist Robert Barro created his own version of the index calculated as the sum of the inflation, unemployment rates and the central bank’s interest rate plus (minus) the shortfall (surplus) between the actual and trend rate of Gross Domestic Product (GDP) growth (year-on-year, YOY, variation) i.e. adding-on negative balances and deducting positive variations in GDP. For the purpose of this exercise we decided to ignore interest rates.

Growth Misery Index = unemployment rate + inflation rate + (interest rate – interest rate) + YOY GDP variation

Super Misery Index

A subsequent iteration of Misery Index is to revise the Growth Misery Index to take into account government net lending / borrowing (expressed as a percentage of GDP), adding-on contractions and deducting positive variations.

Super Misery Index = unemployment rate + inflation rate + variation in GDP + government net lending / borrowing








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