The Big Mac burger costs $5.36 in the US and £3.79 in the UK, and that element of “fast food” is enough to make an indirect inference about the two currencies.

Menu parity is 0.71 when the real exchange rate between the two currencies is 0.81, which means that the British pound is undervalued by 12.9%, explains The Economist.

With a touch of humor, the Economist coined this “Big Mac Index” in 1986 as a “gastronomy” guide to the level of currency values ​​of different countries, based on fluctuations in the price of hamburgers.

It is based on the theory of purchasing power parity, the idea that, in the long run, exchange rates should move towards equalizing the prices of the same “basket” of goods and services (in this case, a hamburger) across countries.

Based on the Big Mac Index, taking the US dollar as the base currency and examining price fluctuations between 2000 and 2023, the Swiss franc is at the top with a rate of +35.4%. It is followed by Uruguay (+27.8%) and the Norwegian krone (+22.9%). As for the euro, it seems to have depreciated by 1.4%.

Egypt (-65.6%) and Indonesia (-56.1%) close the list. As for the Turkish lira, it is -25.6%.

Burgernomics has never been an accurate tool for assessing monetary disequilibrium, but merely to help make exchange rate theory more understandable. However, the Big Mac Index has become the world standard, is included in many financial textbooks, and is the subject of dozens of academic studies.