Economic Discomfort Trend – Where Do The European Union Countries Stand?

Abstract :

The economic discomfort felt by households is a matter of great interest for policy makers and economic agents. Increasingly more misery indices and economic sentiment indicators are considered reliable measures of the economic satisfaction. The paper has several qualitative and empirical objectives, namely: i) a comprehensive review and comparison between the existing misery indices; ii) the assessment of the degree of economic discomfort felt by European Union households during 2001-2016 by relying on a comprehensive range of misery indices and sentiment indicators; iii) performing an exploratory statistical analysis, called Cluster Analysis, to identify the presence of similar economic discomfort patterns, from both a temporal and regional perspective. Direct results consist in gathering into homogeneous, meaningful groups the most resembling countries, and respectively time periods from the viewpoint of several objective and subjective indices that reveal the public perception on contemporary economic developments. The clustering solution obtained indicates that some countries are synchronized in terms of macroeconomic fundamentals that lie at the origin of the computed misery indices. Indirectly, the results of the cluster analysis depict the current state of economic convergence in the region.