The Effect of Knowledge-Based Economy Components on Misery Index in Selected Countries

The sum of inflation and unemployment rates is called the misery index, and its escalation can be associated with many social and economic costs such as increased crime, reduced social security, and harm to the mental health of the society. The present study investigates the effect of knowledge-based economy components on the misery index in two groups of selected countries via the approach of panel data and generalized moment method at the level of pre-innovation-driven stage and innovation-driven stage for the period 2008-2018. The results showed the effect of all components of the knowledge-based economy (including economic incentives and institutional regime, innovation system, training and development of human resources and ICT infrastructure) with different estimated coefficients and at different levels of confidence was negative and significant on economic misery in both groups of selected countries. In addition, the effect of control variables, including population and abundance of natural resources, on the misery index in the pre-innovation-driven stage in the selected countries is positive and significant; yet it is not significant in the innovation-driven stage. Also, the effect of economic openness on the misery index in both groups of selected countries was negative and significant.