Wednesday, December 22, 2004
Big Mac Index for 2004
So the latest and final 2004 Big Mac Index was released by the Economist this week. Continuing the trend of past BMI, China is at the bottom of the list, with a US $1.26 burger.
This implies that the yuan is 58% undervalued relative to its Big Mac dollar-PPP. On the same basis, the euro is 25% overvalued, the yen 17% undervalued.So as we wind down the year, any predictions from the smart folks who read/write this blog?
- Will the US dollar recover from its slide in the first half of next year?
- Will the Chinese revalue the yuan in 2005?
- A euro costs about US $1.34 (the cost of one Big Mac in China plus change!), so which way will it move in 2005?
