that’s what the Big Mac index says

Economists around the world are looking for global products that can determine if the value of a currency is less than the dollar. Comparison with the price that the same product has in other parts of the planet allows us to draw a conclusion.

For more than 30 years the magazine The Economist uses as a reference Big Mac Price, the hamburger of the multinational chain of fast food restaurants McDonald’s, present in the most important cities of the world. The comparisons gave accurate results, so the “see Big Mac“Its latest update includes prices for the month of June.

“According to the magazine’s measurement, a Big Mac costs $ 380 in Argentina and $ 5.65 in the United States. The implied exchange rate is $ 67.26. The difference between this rate and the real exchange rate, $ 96.33, suggests that the Argentine peso is undervalued by 30.2%The Economist, which took the wholesale dollar price earlier this week, said. The figure was slightly lower than the 33.8% it marked in the previous survey, released in January.

Another way to look at it: the dollar would have to drop 30.2% – to $ 67.26 – for a Big Mac to cost the same as it does in the United States. bought in Argentina, so the country is supposed to be “cheap” for the one with the dollars in hand.

On the other hand, you have to consider that someone who arrives with dollars in Argentina – to eat burgers or the like – might be inclined to change their tickets in the unofficial market. In fact, blue rose $ 17 this month and closed on Friday at $ 185. At the official exchange rate, a Big Mac in Argentina costs US $ 3.95, but at “blue” value it is only US $ 2.05.

In other words, with the US $ 5.65 that a Big Mac is bought in the US, Argentina – after a change in an informal cave – 2.75 of those same sandwiches are bought in the McDonald’s chain.

How much does the Big Mac cost in other countries?

A key piece of information revealed by the Big Mac Index is that all countries in the region are relatively cheap in dollars. In other words, in each of them, the American bill has a high purchasing power.

• Uruguay It is the country with the most expensive hamburger, since it pays US $ 5.11, which shows that the Uruguayan peso is undervalued by 9.5%.
• Brazil It is also one of the most expensive countries, since the hamburger is paid for US $ 4.36, which translates to an undervaluation of 22.8% for the real.
• In third place among Latin Americans appears the Argentina ($ 3.95).
• keep on going Chile, where the Big Mac costs US $ 3.94, indicating that the Chilean peso is undervalued by 30.3%.
• In Colombia, the burger costs US $ 3.37, so the Colombian peso is undervalued by 40.3%.
• In Peru The burger costs US $ 3.27 and the sun is 42.2% undervalued.
• The cheapest Big Mac in the region can be purchased at Mexico, for about $ 3.17. This implies that the Mexican peso is 43.7% undervalued against the dollar.

El “Big Mac gate” Argentinian

During the years when the Kirchnériste government sought to deny inflation and the indices published by the Secretary of Internal Trade at the time, Guillermo Moreno, did not seem to reflect the reality of the country, the Big Mac index was one of the few resources available to economists to have a more coherent picture.

In July 2011, the Big Mac Index showed that in Argentina the sandwich in question was paid US $ 4.84, which was about $ 20 at the time, compared to US $ 4.07 in the United States.

That is, in the country, the Big Mac was overvalued by 19.1%. This implied that the dollar that sold for $ 4.13 must actually cost $ 4.92.

The government responded and the Big Mac ceased to be optionally displayed on the premises and its price stagnated at $ 21 for three years.

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