#HOW MUCH DOES A BIG MAC COST IN ARGENTINA MAC#
The Big Mac PPP exchange rate between two countries is obtained by dividing the price of a Big Mac in one country (in its currency) by the price of a Big Mac in another country (in its currency). For these reasons, the index enables a comparison between many countries’ currencies. The Big Mac was chosen because it is available to a common specification in many countries around the world as local McDonald’s franchisees at least in theory have significant responsibility for negotiating input prices. In the Big Mac Index, the basket in question is a single Big Mac burger as sold by the McDonald’s fast food restaurant chain. One suggested method of predicting exchange rate movements is that the rate between two currencies should naturally adjust so that a sample basket of goods and services should cost the same in both currencies. The index also gave rise to the word burgernomics. The Big Mac index was introduced in The Economist in September 1986 by Pam Woodall as a semi-humorous illustration of PPP and has been published by that paper annually since then. It “seeks to make exchange-rate theory a bit more digestible”. The Big Mac Index is published by The Economist as an informal way of measuring the purchasing power parity (PPP) between two currencies and provides a test of the extent to which market exchange rates result in goods costing the same in different countries. That, in turn, has led the McDonaldses to radically de-emphasize the suddenly non-profitable signature sandwich in favor of the Triple Mac and other offerings.McDonald’s prices around the world are an incredibly useful means to measuring purchasing power parity between countries but how much does a McDonald’s meal cost around the world for a South African.
To that end, the Argentine state leaned on Argentina’s McDonaldses to exercise restraint in their Big Mac pricing. The Big Mac Index is one well-known international check on government number-fudging, and the Economist’s editorial line is very hostile to the kind of populist economic policies Cristina Kirchner has pursued, so the government knows it’s vulnerable to the wrath of the index. The government, however, insists that the inflation rate is considerably lower than independent observers say. But the real state of Argentina’s currency is visible in the rising price level, since the country engages in a lot of trade. In practice, I wasn’t able to get a deal that good from either of the people I traded under the table with but still I got a substantial discount vis-a-vis the official rate. Hostile press reports I’ve read suggest the black market rate is 5 pesos to the dollar. Unofficially, you can get more pesos for your dollar on the black market. Officially, a dollar is worth about 4.2 pesos. This in turn has led to a dual exchange rate system. But the Argentine government wants to limit capital flight so they’ve put curbs on how much foreign exchange an Argentine can buy. Some time ago, Argentina defaulted on its debt and ever since Argentine households are inclined to hold a substantial share of their savings abroad in foreign-denominated assets. Well, it’s all a sordid tale of capital controls and fuzzy math.
Instead, the Argentine McDonaldses are all about pushing you to buy a Triple Mac or a Cuarto de Libre. What’s more, even though that sign is in the store on a wall somewhere, the big displays that are clearly visible while you’re standing in line don’t so much as advertise the existence of the Big Mac.
0 kommentar(er)
