Knoema.com - PPP http://knoema.fr 2015-01-30T12:44:18Z /favicon.png Knoema est votre Route du savoir personnelle The Big Mac Index update //knoema.fr/ijlkhjc/the-big-mac-index-update 2015-01-30T12:44:18Z Alex Kulikov knoema.fr://knoema.fr/user/1847910
The Big Mac Index update

The Economist has recently updated its famous “Big Mac Index” based on McDonald’s Big Mac prices, collected throughout the world. Now the cheapest burgers in US Dollar terms can be bought in Ukraine: for $1.2 only. The most expensive ones are being sold in Switzerland, where you should pay $7.54 for one burger. Big Mac Index shows, how much the national currency is “undervalued” or “overvalued” in relation to “fair” Big Mac price. In respond to the criticism that you would expect average burger prices to be cheaper in poor countries than in rich ones, it was adjusted for differences in countries' GDP per capita. E. g., in case of Russia, US$ Index of -57.75 means that current Russian Ruble/US$ market exchange rate is 57.75% lower than its Big Mac purchasing power parity level. Explore the new Knoema’s interactive abilities to parameterize visual gadgets by two or more variables by selecting the country on the map and the type of Big Mac Index in the table below Note: Big Mac index has never been intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible. As the empirical data shows, Big Mac Index tells nothing about possible real world currency moves neither in short-term, nor in the long-term. In the long run exchange rates do not move towards the rate that would equalise the prices of a burger in any two countries. The data presented is not intended to use in any investment or trading decisions on FX or other markets.

Alex Kulikov knoema.fr://knoema.fr/user/1847910