Since 1986 we have tracked the price of a McDonald’s Big Mac around the world as a light-hearted guide to the fair value of currencies
The Economist
Compared with the rest of the world, however, Americans have escaped lightly. From January to July the price of a Big Mac has risen more than twice as fast in the euro zone andWhat does this mean for the fair value of currencies? According to the theory of purchasing-power parity, a currency’s fundamental value reflects the amount of goods and services it can buy, including burgers. If the price of the Big Mac rises, the currency can buy fewer of them. Its fair value has therefore declined.
That is no longer the case. Thanks to the rise in Big Mac prices in Europe and a small fall in the dollar, the fair value of the euro is now $1.06, less than its market exchange rate. The euro now looks overvalued against the dollar for the first time in two years.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Klopp allays fears about Mac Allister knock after Liverpool fans worried by footageJurgen Klopp has allayed any fears that Alexis Mac Allister’s knock sustained in a friendly against Bayern Munich is serious. Mac Allister hobbled off just before half time of the Reds’…
Read more »
I told Forest I was signing for Leeds instead of them and the manager hung up on meAlexis Mac Allister was one of this summer’s eye-catching transfers, but he’s not the first Mac Allister to have caused a stir whilst moving clubs. Well, technically the other Mac Allis…
Read more »
Big Bang Theory star Kunal Nayyar's drama Suspicion axed after one seasonBang goes the drama.
Read more »