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Abstract
A fractal analysis of misery index across eighty-nine (89) countries based on Economist Intelligence Unit (2013) was the focus of this study. Specifically, it looks into the global implication of fractals on misery index across countries. Results show that the misery of the citizens of the country is influenced by internal and external economic conditions. Internal or domestic economic factors like consumer prices and unemployment can be controlled and managed by the country's government while the external and international factors like interest rate is largely influenced by the international economic activities. The effective economic policies of the government alleviate the citizens of the country from misery.
Keywords: Fractal Analysis, Misery, Misery Index, Economic Policies,
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Introduction
The misery index is designed to help determine how the average citizen is doing economically. It is a measure of economic well-being for a specified economy, computed by taking the sum of the unemployment rate and the inflation rate for a given period. An increasing index means a worsening economic climate for the economy in question, and vice versa (Investopedia, 2014). The index was invented by Arthur Okun and used to characterize the current economic condition. The main assumption in this index is that an increasing unemployment rate and relatively high inflation have a negative impact on economic growth.
In economic terms, a rise in inflation coupled with high unemployment leads to lower consumer expenditures and contributes to an economic slow-down (Investment dictionary, Academia, 2012). This is a quick way to gauge how the average person is doing as both high unemployment and high inflation are major factors to the average wage earner. As inflation rises the cost of living increases and as unemployment rises, more people cross the economic line into poverty.
Misery index is not a perfect measure of poverty, but it changes over time and in different countries it reflects changes in society`s economic performance (Lechman, 2009). As noted, it can be used as a proxy of economic and social welfare. The index is very basic and makes an assumption about the marginal substitution rate among some economic outcomes and indicators. By calculating the misery index, the potential "misery" or "unhappiness" of individuals in a country is strongly affected and...