The release of the Hanke Misery Index (HAMI) made headlines this Tuesday in Cuba as the island tops a list of 156 countries.
What is the Hanke Annual Misery Index?
Steve Hanke is an American economist, professor at the renowned Johns Hopkins University.
After the publication of the 2021 results, the author himself clarified that his “misery index is the sum of unemployment, inflation and bank lending rates minus the annual percentage change in real GDP per capita”.
To put it less economically, Hanke explains that human wellbeing lies on a wide spectrum between “miserable” and “happy”.
Thus, “misery can be created by high inflation, high borrowing costs and unemployment.
“The sure way to alleviate this misery is economic growth. Comparing countries’ metrics can tell us a lot about where in the world people are sad or happy,” he adds in a text published in National Review.
Several economists believe that the Hanke Index is not expressed in terms of extreme poverty, but rather in terms of countries’ wellbeing according to certain economic indicators.
In fact, Hanke titles his report like this: “Hanke Misery Index 2021: Who is miserable and who is happy?”
The economist announced this on Twitter he showed: “Communist Cuba, devastated by a high inflation rate of 1,221.8% per year, is the most “miserable place in the world. Socialist Venezuela is close behind in second place.
Going into detail, Hanke claims that “Cuba had a dramatic drop compared to last year’s HAMI.”
“This level of inflation is not surprising given the 95 percent devaluation of the peso in Cuba in 2021. Currency devaluations lead to increased inflation rates. In fact, the cost of producing goods and services, including exports, will also increase in a country that has devalued its currency, he continues.
The economist believes that the country of Cuba “can reverse this inflationary crisis by installing a currency board.”
As he explains, “on request, a currency board will issue convertible bonds and coins in a foreign anchor currency at a fixed exchange rate.”
“Conversion boxes exist in about 70 countries. They have not failed in anything, he assures.
