Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Big Mac index: Our interactive currency comparison tool

economist.com

Post reply on HN
Print view View original

141–150 of 192 posts

Re: The Big Mac index: Our interactive currency comparison tool

#141

Post by beachwood23 »

arcticbull wrote: post #110
JohnJamesRambo wrote: post #27

Thought it was going to be this one, which I enjoy using a lot and find useful for getting the big picture. https://inflationchart.com/cpi-in-bigmac https://inflationchart.com/spx-in-bigmac In the 70s you could work minimum wage for an hour and afford three Big Macs. Now you have to work almost an hour to afford one Big Mac.: https://inflationchart.com/minwage-in-bigmac

From the right side: > "You're now losing -1% of your money to inflation per year or 1.0% per month" What on earth does that mean? Inflation of 6% annualized is 0.4% per month. Big Macs against the S&P 500 is some sort of chart crime. Yeah, companies became more valuable because we're good at making companies. That's got very little to do with ... anything. [edit] Especially since the S&P 500 isn't some sort of plato…

> Further, wage growth not matching production efficiencies or even decelerating is not a monetary policy issue (or anything to do with inflation) but a social policy issue. Specifically, minimum wage not tracking inflation, and in my opinion, a broad-based rejection of unions.

It can be both a monetary policy issue and a social policy issue.

Entities that are close to the money-creation spigot that is the Fed have a decreasing cost of money and debt. Anyone / thing further from the cheap supply of money have seen less benefit. The people working for minimum wage are very far from the cheap supply of money.

Social policy, as you point out, has not kept up with monetary policy. But the problem is initiated from monetary policy.

Re: The Big Mac index: Our interactive currency comparison tool

#142

Post by sdze »

petercooper wrote: post #14

I don't see how this really works any more because a Big Mac is different in different countries. It's not an "identical" product being compared. You can use McDonald's own local nutrition calculators to confirm this. A Big Mac in the US is 550 calories, yet 508 calories in the UK (522 in Russia and a mere 498 in Switzerland, for comparison). Is it factored into the index that British fast food fans are getting 7.6%…

Maybe these countries all have different calorie counting rules.

Re: The Big Mac index: Our interactive currency comparison tool

#143

Post by sdze »

JohnBooty wrote: post #94
tinotopia wrote: post #44

Earlier quoted context omitted.

In the past few years, McDonald's (and some, but not all, other fast food restaurants) really seems to have gone all-in on the price-discrimination approach of setting list prices high and offering all kinds of discounts if you know where to look. Relevant to the Big Mac Index, at the moment the app offers a two-for-one deal, through February 27, on Big Macs; so the effective price isn't $5.81 but $2.90. If you don't…

In the past few years, McDonald's (and some, but not all, other fast food restaurants) really seems to have gone all-in on the price-discrimination approach of setting list prices high and offering all kinds of discounts if you know where to look. Not that this is exactly some secret but a while back, it was explained to us (by somebody reasonably high up the org chart at McDonalds) is that the sandwiches themselves…

They must hate me because I only buy 4 hamburgers.

Re: The Big Mac index: Our interactive currency comparison tool

#144

Post by pessimizer »

jstx1 wrote: post #22
aphroz wrote: post #18

It's maybe 20% more expensive in Switzerland but it tastes better.

US vs UK McDonald's comparison - https://www.youtube.com/watch?v=ZMaW6TamNAc The differences in the ingredients lists are hilarious (oh and the portion size difference for the drinks).

The calorie difference wasn't as bad as I was expecting. I always forget, because the UK is always making fun of the US for being fat, that they're the fattest people in Europe (well, they trade the title back and forth with the Greeks.)

Re: The Big Mac index: Our interactive currency comparison tool

#145

Post by aidenn0 »

sdze wrote: post #142
petercooper wrote: post #14

I don't see how this really works any more because a Big Mac is different in different countries. It's not an "identical" product being compared. You can use McDonald's own local nutrition calculators to confirm this. A Big Mac in the US is 550 calories, yet 508 calories in the UK (522 in Russia and a mere 498 in Switzerland, for comparison). Is it factored into the index that British fast food fans are getting 7.6%…

Maybe these countries all have different calorie counting rules.

Indeed, plus even in a single regulatory region you may have many allowable ways of counting the calories that end up with different results.

Re: The Big Mac index: Our interactive currency comparison tool

#146

Post by aidenn0 »

arcticbull wrote: post #108

I'm curious how the Hong Kong Dollar can be "undervalued" with respect to the US Dollar by 51.4% when it's pegged 1:7.8 PPP doesn't really mean that a currency is 'undervalued' or 'overvalued' with respect to one another, just that local efficiencies or inefficiencies make procurement of a basket of goods relatively more or less expensive there relative to tradeable goods no?

In general island areas will show an "undervalue" for PPP measures. Hawaii Big Macs are more expensive than Indiana big macs, but that doesn't mean that Hawaiian USD are undervalued to Indiana USD.

Re: The Big Mac index: Our interactive currency comparison tool

#147

Post by bryanrasmussen »

jaclaz wrote: post #131
bryanrasmussen wrote: post #53

Earlier quoted context omitted.

>Usually cheap stuff like bread is notoriously expensive in Switzerland for example, maybe ingredient quality in some places might be legally mandated, increasing price (I know everyone gets the same, but not if the law says different) basically the thing I'm thinking of is an article about a year ago where some sort of white bread was declared legally not bread but a form of cake by some EU country - can't remember…

I think you are referring to Subway sandwich bread: https://www.nbcnews.com/news/world/subway-s-sandwich-bread-i...

right it's that, couldn't remember who it was, just saying that there could be regulations and if so that could add to cost in different regions.

Re: The Big Mac index: Our interactive currency comparison tool

#148

Post by arcticbull »

seanmcdirmid wrote: post #140
arcticbull wrote: post #112

Earlier quoted context omitted.

House prices are a zoning issue primarily. [1] In major metros, city councils prevented construction - as such supply could not meet demand and the price of housing in cities went up dramatically more than inflation. Outside major metros, minimum setback rules, minimum size rules, and myriad other policies conspired to make the average new house twice as large as they were before, while families on average shrunk. Th…

Zoning existed in the 1970s also. > Outside major metros, minimum setback rules, minimum size rules, and myriad other policies conspired to make the average new house twice as large as they were before, while families on average shrunk. Outside major metros, the economy isn't as hot and demand is tapered back significantly. In cities that have poor economies, housing prices are also cheap. In places that are extremel…

In SF you can't build a house that casts a shadow over a park ever no matter how small. The entire western half of the city is zoned for 4-story housing. This is why housing is expensive in SF. SF added less than half as many houses over the last few decades as necessary to keep pace with job growth and there's simply no excuse for it. [1]

[1] https://en.wikipedia.org/wiki/File:San_Francisco_aerial.jpg

Re: The Big Mac index: Our interactive currency comparison tool

#149

Post by arcticbull »

beachwood23 wrote: post #141
arcticbull wrote: post #110

Earlier quoted context omitted.

From the right side: > "You're now losing -1% of your money to inflation per year or 1.0% per month" What on earth does that mean? Inflation of 6% annualized is 0.4% per month. Big Macs against the S&P 500 is some sort of chart crime. Yeah, companies became more valuable because we're good at making companies. That's got very little to do with ... anything. [edit] Especially since the S&P 500 isn't some sort of plato…

> Further, wage growth not matching production efficiencies or even decelerating is not a monetary policy issue (or anything to do with inflation) but a social policy issue. Specifically, minimum wage not tracking inflation, and in my opinion, a broad-based rejection of unions. It can be both a monetary policy issue and a social policy issue. Entities that are close to the money-creation spigot that is the Fed have a…

The "money creation spigot" is lending. Anywho who borrows money is at the spigot - that's how fractional reserve lending works, and that's where money comes from. This means anyone with a mortgage, anyone with a credit card, anyone with a post-paid phone plan.

Indexing minimum wage to inflation substantially solves the problem.

Can you quantify the spread you claim exists here? I feel like just pointing to the "cantillon effect" and blaming it for everything without actually quantifying the magnitude of the issue you think exists is harmful to the discourse.

The charter of the central bank is to maintain low predictable inflation and maximize employment. That's the function of monetary policy.

Re: The Big Mac index: Our interactive currency comparison tool

#150

Post by 988747 »

yokoprime wrote: post #89
detaro wrote: post #85

Earlier quoted context omitted.

Where in Europe is McDonalds a "hipster place"?

Apparently "central europe". In western and northern europe its certainly not a hipster placer.

I remember that when I was attending primary school in Central Europe, a stop at McDonald's was the most anticipated moment of every school trip. That was 25+ years ago though, and we were kids...
Post reply on HN