It's your basic down-to-the-bones cost-of-living (price of cheese, price of beef, price of bread) index. Lots of folks swear by it, but I think it has some flaws.... Still, it ain't bad for a synopsis kind of thang.


Can you tell me if I understand the basic premise correctly, Anna? The most recent publication of the index was commented on in my local rag, and the story went thusly: A Big Mac should, theoretically, cost the same in US dollars everywhere. If A Big Mac costs less in greenbacks than in the States, that currency is undervalued. If it costs more, it is overvalued. By that reckoning, apparently, the two most undervalued currencies in the developed world are the AUD and the NZD, both undervalued by between 40 and 43%. A Big Mac here costs the equivalent of around $1.51 US. In Switzerland, apparently, it costs around $5 US, making the SFR the most overvalued currency in the Big Mac Index. The authors of the index do say that is intended largely as a lighthearted way of conveying basic trends, and ought not be viewed as Gospel.