Tag: purchasing power parity
Big Mac Index
The British pound is 12.9% undervalued against the US dollar. A Big Mac costs £3.79 in Britain and US$5.36 in the United States. The implied exchange rate is 0.71. The difference between this and the actual exchange rate, 0.81, suggests the British pound is 12.9% undervalued. I was reminded of the Big Mac Index during a call with some of my colleagues, and this information is from The Economist’s Big Mac Index and the latest data is January…
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