(NewsNation) — Americans are still feeling down about the economy, but popular metrics like the Consumer Price Index (CPI) and the unemployment rate are missing one of the big reasons why: The cost of money has gone up.

That’s the argument in a new working paper titled “The Cost of Money is Part of the Cost of Living” by former U.S. Treasury Secretary Larry Summers and other top economists who make the case that elevated interest rates are behind the dour consumer sentiment.

“Consumers are including the cost of money in their perspective on their economic well-being, while economists are not,” they write.

Americans have seen the cost of borrowing for big-ticket purchases like cars and homes skyrocket thanks to rising interest rates but the impact of those hikes isn’t properly reflected by the CPI, the economists argue.

For example, the Bureau of Labor Statistics measures the change in vehicle prices using transaction data reported by dealers across the country but that excludes financing costs, the authors point out.

Credit card interest rates have also shot up and fewer people are paying with cash but the CPI doesn’t differentiate between payment methods, which understates the pressure consumers are feeling, the paper says.

When it comes to housing, the CPI doesn’t include mortgage interest, instead, it measures housing prices based on how much homeowners would pay to rent their home.

“The exclusion of these costs means that the current methodology excludes a central part of consumers’ financial well-being,” the economists wrote.

When Summers and others factored in the big increase in borrowing costs, the gap between actual and predicted consumer sentiment closed by more than 70%.

The economists also found that the current disparity is not unique to the United States.

“We find little evidence that the United States, despite its rising partisanship, social distrust, and large reported levels of overall “referred pain” differs meaningfully from other Western democracies,” the authors wrote.

The new paper could help explain a discrepancy that continues to vex the Biden administration and economists alike.

Even with the unemployment rate near a historic low, a hot jobs market and easing inflation, consumer sentiment is roughly where it was in 2011.

Recent polling from NewsNation/Decision Desk HQ showed a plurality of Americans (47%) feel worse off financially than they did a year ago.

Another Gallup poll from January found 45% of Americans rate the economy as “poor” and 63% said it’s getting worse.

If Summers’ model is correct, it may take “a substantial interest rate decline to convince voters that the (Biden) administration has made good on the American economic bargain,” New York Times columnist Ross Douthat wrote earlier this week.

Fed Chair Jerome Powell has indicated that three rate cuts could be coming this year, a move that’s expected to start as early as May.