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NZ dollar 14% undervalued, says the Big Mac Index

The Economist
Mon, 25 Jul 2022

NZ dollar 14% undervalued, says the Big Mac Index
They call it burgernomics, and the data doesn't lie. (Image: Getty)
The Economist
Mon, 25 Jul 2022
The Big Mac Index was invented by The Economist in 1986 as 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 in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries.Burgernomics was never intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible. Y...

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