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The Economist – Big Mac Index

Posted By Jim On 10/24/2005 @ 11:31 am In General | 1 Comment

From department of fun economics: The Economist puts out their Big Mac Index [3] every few months, which they claim is “the world’s most accurate financial indicator to be based on a fast-food item.” The Big Mac Index is a measurement of a currency’s purchasing power based on the price of a Big Mac in that country. The idea is that since a Big Mac is the same in every country (obviously not the case, but close enough) then you should be able to derive an exchange rate, compare it to the actual exchange rate, and figure out if a currency is over or undervalued.

Here’s the latest Big Mac index from June 5th, 2005 [4].

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[3] Big Mac Index: http://www.economist.com/markets/Bigmac/Index.cfm

[4] Big Mac index from June 5th, 2005: http://www.economist.com/markets/bigmac/displayStory.cfm?story_id=4065603

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