As well as having an effect on your appetite, the Big Mac also has a say on the economy.
McDonald’s signature burger has been used to measure the interplay between the world’s currencies for 26 years.
The Big Mac Index was established by The Economist in 1986 as a fun way of examining if currencies were at their correct level. Based on the notion that a dollar should buy the same amount in all countries, the index roughly measures the purchasing power parity (PPP) between two currencies. PPP adheres to the notion that exchange rates should adjust to make goods the same price in each country.
The goal of the Big Mac Index was to ‘make exchange-rate theory a bit more digestible’. Burgernomics, as The Economist dubbed it, was born. The index was invented by one of the magazine’s writers, Pam Woodall.