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What’s That Got to Do with the Price of a Big Mac in China?

I’ve written about The Economist magazine’s “Big Mac Index” many times in The Global Guru.

But if you’re new to this quick and dirty but useful method of measuring the relative values of global currencies, then here’s the basic idea.

One of the best ways to get your head around relative currency valuations is to look at what the same goods cost in New York, London, Tokyo, Beijing and elsewhere.

Editors at the Economist magazine knew that as well, so in 1986 they created the now-famous “Big Mac Index,” a tongue-in-cheek but surprisingly useful way of measuring purchasing power parity, read more…