Wednesday, July 11, 2007

Balassa Samuelson and Le Big Mac

The Economist has published a new Big Mac index. It is the best way to teach Power Purchasing Parity to undergrads. Furthermore the index is useful to explain the Balassa Samuelson effect, one of the most interesting and comprehensive theories/effects of economics. It explains long term trends in exchange rates, as well as why tourists from developed countries travel abroad in search of sex e medical treatment.
By the way, there is a Big Mac boom going on in Paris.

1 comment:

fyi said...

The Big Mac in France thing is great. I'll post about it :-)