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Federal Reserve Bank of St. Louis
Review
The impact of inflation and unemployment on subjective personal and country evaluations
Néstor Gándelman
Rubén Hernández-Murillo
Abstract

The authors use data from the Gallup World Poll to analyze what determines individual assessments of past, present, and future personal and country well-being. These measures allow the analysis of two dimensions of happiness data not previously examined in the literature: the better-than-average effect and optimism. The authors find that individuals tend to evaluate their personal well-being as being better than their country's and tend to expect that their future well-being will improve. The authors also analyze the impact of inflation and unemployment on these subjective measures and find that both variables have a negative effect on individuals' assessments of past and present well-being for themselves and their country; in contrast with other studies, however, they do not find that the effect of unemployment is significantly different from that of inflation.


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Néstor Gándelman & Rubén Hernández-Murillo, "The impact of inflation and unemployment on subjective personal and country evaluations" , Federal Reserve Bank of St. Louis, Review, issue May, pages 107-126, 2009.
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Keywords: Inflation (Finance) ; Unemployment
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