The Economist Big Mac Index

In: Food Global Economy Source: Economist US Economy

6 Jan 2010

THE Big Mac index is based on the theory of purchasing-power parity (PPP)-exchange rates should equalise the price of a basket of goods in different countries. The exchange rate that leaves a Big Mac costing the same in dollars everywhere is our fair-value benchmark. So our light-hearted index shows which countries the foreign-exchange market has blessed with a cheap currency, and which has it burdened with a dear one.


1 Response to The Economist Big Mac Index



January 6th, 2010 at 7:49 pm

might find this interesting: tracks Big Mac Index in ETFs: shorts overvalued currency ETFs and buys undervalued currency ETFs. Curious to see how accurate the Big Mac Index is in the real world

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