The Economist has come out with an updated version of the popular Big Mac Index, which is based on the theory of Purchasing Power Parity.
This theory states that in the long run, exchange rates will adjust so that a basket of goods costs the same in each country. The "real exchange rate" is then equivalent to the nominal exchange rate adjusted for differences in price levels.
You can check it out here.
Great Graphic: Big Mac Index
Reviewed by magonomics
on
January 13, 2012
Rating:
Reviewed by magonomics
on
January 13, 2012
Rating:
