Which is consistent with previous PPP research findings”įor decades the Economist has been publishing its Big Mac Index to give an estimation of how under- or over-valued a currency is. In tracking exchange rates over the long-term, “Our results indicate that the Big Mac Index is surprisingly accurate By how much is it really undervalued? And what does that say about our economy? So let’s have a look at what the Index is saying about our Rand.
And whilst many economists question the real value of “Burgernomics”, and whilst it indeed began as nothing more than a lighthearted attempt at establishing currency values, it has over the decades gained a degree of traction and credibility. Hence The Economist’s annual “Big Mac Index”. Over 80 countries worldwide produce McDonald’s Big Mac hamburgers to similar recipes, and that, say some researchers, makes them a perfect universal commodity with which to compare the PPP (Purchasing Power Parity) of different currencies.
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