Economic Discomfort and Consumer Sentiment

Michael Lovell and Pao-Lin Tien

Eastern Economic Journal, 2000, vol. 26, issue 1, 1-8

Abstract: This paper finds that the Economic Discomfort Index (aka "Misery Index"), defined by Arthur Okun as the sum of the unemployment rate plus the annual rate of inflation, provides a rough and read explanation of economic malaise as measured by the University of Michigan Index of Consumer Sentiment. A more precise explanation of Consumer Sentiment includes the rate of change in unemployment, the rate of change in the S&P and the growth rate of real GDP; but dummies indicating Presidents insignificant. Studying the determinants of Consumer Sentiments helps validate the procedure invoked by Okun for constructing his Economic Discomfort Index.

Keywords: Consumer (search for similar items in EconPapers)
JEL-codes: D12 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (26)

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