Simplifying The Big Mac Index1. (20th August 2016)

• Record Type: Journal Article
• Authors: Clements, Kenneth W.; Si, Jiawei
• Is Part Of: Journal of international financial management & accounting. Volume 28:Number 1(2017:Spring)
• Page Start: 86
• Page End: 99
• Publication Date: 2016-08-20
• Subjects: International business enterprises -- Finance -- Periodicals; International finance -- Periodicals; Managerial accounting -- Periodicals; Electronic journals; 658.15
• DOI: 10.1111/jifm.12058
• Languages: English
• ISSNs: 0954-1314

Abstract

Abstract: The Economist magazine recently introduced a major innovation to its famous Big Mac Index of currency values by adjusting for differences in incomes of countries. A recent paper (O'Brien and Ruiz de Vargas, 2017, OR) explains clearly the workings of the new index, something overlooked by The Economist. The current article draws on OR to suggest an alternative formulation that is attractive in its simplicity.