THE BIG MAC INDEX: THE EURO IS OVERVALUED BY 29%
The Economists Big Mac Index is an alternative perspective on purchasing power parity. By comparing the price of a common product across various economies they achieve a fairly reliable currency valuation. The latest data is interesting given the recent events across the global economy. According to the Economist the Euro is 29% overvalued, the Yuan is 40% undervalued and the Brazilian Real is 42% overvalued.
Read more about the Big Mac Index here.
Source: The Economist
Cullen Roche
Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.
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That would put a price target on the Euro of parity to the USD. Hmmmm….Perhaps I’ll go by the Taco Bell index.
Good lets buy it in china and sell it in the Europe. They say it does not deteriorate.