 The Big Mac Index has been used by The Economist magazine for over twenty years (seriously) |
You may not be particularly fond of that venerable double-decker all-beef concoction, but in a quarter of a century the world's most famous hamburger is now sold in over 25,000 restaurants in 116 countries. The product, for better or worse, is remarkably consistent in each of its international incarnations, making it a particularly useful world economic barometer.
Economists love to bandy about their own unique jargon, but when Purchasing Power Parity (PPP) is expressed as a function of fast-food, just what exactly are they getting at? Well, economists use what they call the Big Mac™ Index to gauge the relative value of currencies around the world, given that the two-all-beef-patty thingo is available in nearly every corner of the known world as a virtually identical product.
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