the economist recently update its big mac index. it's an index based on the oh so famous big mac (not the whopper! ;)) and its cost in various countries:
Burgernomics is based on the theory of purchasing-power parity, the notion that a dollar should buy the same amount in all countries. Thus in the long run, the exchange rate between two countries should move towards the rate that equalises the prices of an identical basket of goods and services in each country. Our "basket" is a McDonald's Big Mac, which is produced in about 120 countries. The Big Mac PPP is the exchange rate that would mean hamburgers cost the same in America as abroad. Comparing actual exchange rates with PPPs indicates whether a currency is under- or overvalued.
sweden's price is $4.86, compared to the states where it costs $3.41. $6.88 in iceland, $1.45 in china. don't exactly remember how it was in israel, but quite expensive there too...
Burgernomics is based on the theory of purchasing-power parity, the notion that a dollar should buy the same amount in all countries. Thus in the long run, the exchange rate between two countries should move towards the rate that equalises the prices of an identical basket of goods and services in each country. Our "basket" is a McDonald's Big Mac, which is produced in about 120 countries. The Big Mac PPP is the exchange rate that would mean hamburgers cost the same in America as abroad. Comparing actual exchange rates with PPPs indicates whether a currency is under- or overvalued.
sweden's price is $4.86, compared to the states where it costs $3.41. $6.88 in iceland, $1.45 in china. don't exactly remember how it was in israel, but quite expensive there too...
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