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Currency Valuation and Purchasing Power Parity

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  • Jamal Ibrahim Haidar

Abstract

This paper aims to highlight key limitations of The Economist magazine’s Big Mac Index (BMI). The Economist markets the BMI as a tool to determine valuation of currencies. This paper shows that the BMI is a misleading measure of currency valuation for economies whose markets are structurally different from the benchmark currency countries.

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File URL: http://www.world-economics-journal.com/Contents/ArticleOverview.aspx?ID=479
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Bibliographic Info

Article provided by World Economics, Economic & Financial Publishing, PO Box 69, Henley-on-Thames, Oxfordshire, United Kingdom, RG9 1GB in its journal World Economics Journal.

Volume (Year): 12 (2011)
Issue (Month): 3 (July)
Pages: 1-12

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Handle: RePEc:wej:wldecn:479

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