According to the report, Venezuela would be the most miserable country in the world.
In response to this, Hanke said: “Venezuela holds the gloomy title of the world’s most miserable country in 2018, as it did in 2017, 2016 and 2015.”
However, Argentina moved to second place after another peso crisis. Since its creation, Argentina has experienced many economic crises due to internal mismanagement and exchange rate problems.
Iran was third in the standings, before Brazil came in fourth.
Turkey took fifth place while the giant of Africa, Nigeria, is ranked sixth.
The poverty index was calculated using economic indices including unemployment, inflation and bank loan rates.
For Nigeria, the unemployment rate was the main factor contributing to its state of miserability.
According to Hanke, “the first impoverishment index was built by economist Art Okun in the 1960s to provide President Lyndon Johnson with a glimpse of the easily digestible economy. This initial misery index was simply the sum of a country’s annual inflation rate and its unemployment rate. The Index has been modified several times, first by Robert Barro of Harvard, then by myself. “
“My modified impoverishment index is the sum of unemployment, inflation and bank credit, subtracted from the percentage change in real GDP per capita. Higher readings on the first three items are “bad” and make people more miserable. These are offset by a “good” (growth of GDP per capita), which is subtracted from the sum of “evils”. “
A higher impoverishment index corresponds to a higher level of “misery”. This is a fairly simple step for a busy president, with no time for lengthy information sessions, to understand at a glance.