July 17, 2014 5:05PM 

# Latvia, the Country Prof. Krugman Loves to Hate, Wins 1st Prize 

By [Steve H. Hanke](https://www.cato.org/people/steve-h-hanke) 

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I constructed a [misery index](https://www.cato.org/publications/commentary/measuring-misery-around-world) and [ranked 89 countries](https://object.cato.org/sites/cato.org/files/images/global-miseryindexbg.jpg) from most to least miserable based on the available data from the Economist Intelligence Unit. My methodology is a simple sum of inflation, bank lending and unemployment rates, minus year-on-year per capita GDP growth. The table below is a sub-ranking of all former Soviet Union (FSU) states contained in my misery index.

![Media Name: capture1.png](/sites/cato.org/files/styles/pubs_2x/public/wp-content/uploads/capture1.png?itok=KoB9pJH4) 

For these FSU states, the main contributing factors to misery are high levels of unemployment and high interest rates.

The low misery index scores in [Estonia and Lithuania](http://www.hacer.org/pdf/Hanke01.pdf) don’t surprise me as I helped both countries establish sound money with the installation of [currency boards](https://object.cato.org/sites/cato.org/files/articles/steve-hanke-annals.pdf) in 1992 and 1994, respectively. Latvia, [a country Paul Krugman loves to hate](http://krugman.blogs.nytimes.com/?s=latvia), takes the prize for the least miserable of the former Soviet Union countries in this sub-ranking.

##### Related Tags 

[Education](https://www.cato.org/education), [Defense and Foreign Policy](https://www.cato.org/defense-foreign-policy), [General](https://www.cato.org/general), [Government and Politics](https://www.cato.org/government-politics), [Center for Educational Freedom](https://www.cato.org/center-educational-freedom) 

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