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Hamburgers pricing to evidence countries on crisis
The Big Mac Index offers some quick insights into the state of currencies around the globe by comparing the price of Big Macs across countries. Guntram Wolff, an economist at think-tank Bruegel, found evidence that struggling by studying the different prices for McDonald´s Big Mac burger throughout the euro zone between July 2011 and January 2013.
The price of a Big Mac has been used by The Economist for decades as a partially tongue-in-cheek way of judging global currency valuations - the gist being that it costs the same to make but is charged at different prices around the world.
Source: Bruegel computation based on data compiled by the Economist.
Guntram Wolff, an economist at think-tank Bruegel took the data and found that the price rise in Greece, Portugal and Spain has been less than the euro zone average, while in Ireland the price actually fell. These are the main countries undergoing deep economic reform due to the debt crisis. He concludes from this that economic adjustment is working. For example, In Ireland, which has made spending cuts after receiving international aid, the burger price has fallen from 3.80 euros to less than 3.50 euros.
There is one notable exception, however. Heavily-indebted Italy is the most expensive country in the euro area to buy a Big Mac - 3.85 euros - while it costs just 3.64 euros in Germany.