Remember the old Misery Index of Arthur Okun and Robert Barro from the past? It is simply the sum of the unemployment and inflation rates. When it was first invented in the 1970s, the problem of the developed economies was stagflation; that is high inflation together with low growth and high unemployment. Later, it was used in the US to compare the performances of different presidents. High unemployment signifies a lack of jobs and high inflation is about the rise in the cost of living. That is misery to you. Have you ever looked at the misery index for Turkey? My colleagues at TEPAV have just prepared a series for me to look at. Let me make three points regarding the trends in the Turkish Misery Index.

Firstly, a quick comparison of the periods before and during the AKP rule goes a great way to explain the party’s election victories. The index has declined from around 120 in the early 1990s to lower than 20 starting from 2003. The improvement is basically due to the decline in the rate of inflation from more than 80% to around 8%. Remember when the New Turkish Lira was freed of its last six zeros – in 2005. That happened thanks to the Kemal Derviş reforms and the IMF program that was followed to the letter by the new AKP government. So it is a decline in misery that characterizes the first AKP period.

Source:  World Development Indicators (WDI)

Let me come to the second issue. In 2012, the misery index figure for Turkey was around 18,09. Is that actually a low level of misery when compared to other countries? No, it is not. For example, the figures for Korea are much lower. Their 2012 index is 5,40 to Turkey’s 18,09. Initially, Turkey’s current figure seemed high to me, but then I took a look at the figures for the years Okun invented the index. During Gerald Ford’s Presidency between 1974 to 1977, the index peaked at 19,9 in the US. That was considered one major reason for his defeat in the elections. During Jimmy Carter’s years (1977-1981) the index reached its historical high of 21,98, making Carter yet another one-term president. The most recent reading for the US was around 8.

Thirdly, Turkey’s 18,09 should be considered a rather high level of misery when compared to normal countries. The almost horizontal line starting from 2004 around an index figure of 20 means that Turkey’s government has been doing nothing to combat misery after Kemal Derviş reforms.

The reminder about the AKP’s policy experience and the misery index is to give you perspective about the rather shy rate cut by the Turkish Central Bank. Does that mean that our government finally has a sound macro policy framework? I wish.

This commentary was  published in Hürriyet Daily News on 24.05.2014