2016 Big Mac Index from The Economist

THE Big Mac index is a lighthearted guide to whether currencies are at their “correct” level. It is based on the theory of purchasing-power parity (PPP), the notion that global exchange rates should eventually adjust to make the price of identical baskets of tradable goods the same in each country. Our basket contains just one thing, a Big Mac hamburger. From The Economist magazine, updated July 2016.

To view the interactive map on The Economist magazine web site click here.

User guide:

The ‘select base currency’ button allows you to choose from five base currencies: the yuan, the euro, the yen, sterling and the US dollar. You can also choose to see the index in its original ‘raw’ form, or adjusted for GDP per person. By default, the panel at the bottom displays a scatter chart plotting the local price of a Big Mac (expressed in the current base currency) against GDP per person in that country. Select individual points for details.

As you explore the map, the scatter chart will be replaced by a line chart plotting the highlighted country’s under- or over-valuation against the current base currency over time. You can select a country on the map to ‘freeze’ it (with the exception of Internet Explorer), allowing you to mouse-over/tap the line chart and see detailed indicators for your selection over time. To ‘unfreeze’ the map, click/tap on the highlighted country again.

Advertisements