The Economist comes out every year with the Big Mac Index, and although I would like to take credit for it, it is a simple and easy way to see if a country’s currency is under or over valued based on the cost of the Big Mac in that country. Or as they put it ” The Economist’s Big Mac index uses the concept of purchasing power parity which states that the dollar should buy the same amount in all countries. Over time, the exchange rate between two countries should move towards a rate that equalizes the price of an identical basket of goods and services in each country.Comparing the cost of a Big Mac in one country against the price in another should indicate whether a currency is over- or undervalued.”
Here are this years rsults:
2009 2008 2007 2006 2005 2004 2003 2002
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—————– Big Mac Price in U.S. Dollars —————-
Argentina 3.30 3.64 2.67 2.29 1.55 1.60 1.43 1.43
Australia 2.19 3.36 2.95 2.44 2.44 2.46 2.33 1.86
Brazil 3.45 4.73 3.61 2.78 2.74 1.99 1.76 1.48
Canada 3.36 4.08 3.68 3.14 3.01 2.60 2.34 2.21
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2009 2008 2007 2006 2005 2004 2003 2002
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—————– Big Mac Price in U.S. Dollars —————-
Chile 2.51 3.13 2.97 2.94 2.98 2.56 2.47 1.95
China 1.83 1.83 1.45 1.31 1.30 1.26 1.23 1.20
Czech Rep. 3.02 4.56 2.51 2.67 2.60 2.45 2.19 1.96
Denmark 5.07 5.95 5.08 4.77 4.49 4.97 4.72 4.10
Hong Kong 1.72 1.71 1.54 1.55 1.55 1.54 1.55 1.47
Hungary 2.92 4.64 3.33 2.71 2.71 2.85 2.38 2.18
Indonesia 1.74 2.04 1.76 1.57 1.54 1.57 1.93 1.84
Japan 3.23 2.62 2.29 2.23 2.19 2.50 2.47 2.19
Malaysia 1.52 1.70 1.60 1.52 1.47 1.33 1.33 1.33
Mexico 2.30 3.15 2.69 2.57 2.66 2.12 2.21 2.18
Philippines 2.07 1.96 1.85 1.62 1.56 1.42 1.24 1.24
Poland 2.01 3.45 2.51 2.10 2.09 2.06 1.68 1.62
Russia 1.73 2.54 2.03 1.77 1.60 1.49 1.42 1.32
Singapore 2.61 2.92 2.59 2.27 2.20 2.19 1.95 1.86
South Africa 1.66 2.24 2.22 2.11 2.29 2.44 1.97 1.84
South Korea 2.39 3.14 3.14 2.62 2.56 2.36 2.80 2.73
Sweden 4.58 6.37 4.86 4.53 4.28 4.46 4.15 3.60
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2009 2008 2007 2006 2005 2004 2003 2002
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—————– Big Mac Price in U.S. Dollars —————-
Switzerland 5.60 6.36 5.20 5.21 4.93 5.46 5.11 4.59
Thailand 1.77 1.86 1.80 1.56 1.51 1.52 1.51 1.38
Turkey 3.13 4.32 3.66 2.72 3.07 2.80 2.94 2.34
USA 3.54 3.57 3.41 3.10 3.15 3.00 2.80 2.71
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