Anyone who pays their electricity bill or buys groceries does not need to be lectured about inflation. Nor do they need relentless economic analysis to make clear the impact of what Ronald Reagan called the “violent robber – as deadly as a killer.”
Here are countless economic indices that predict and project everything from house prices to exchange rates based on complicated mathematics. Many of them “follow” an imaginary shopping cart. Most are terribly boring; It is not for nothing that economics is considered the dark science.
But the one I’m referring to that’s more rooted in real people’s lives than in ivory towers is the Big Mac Index.
Created by no less august journal than The economistit tracks the price of the ubiquitous burger around the world and provides a prosaic indicator of purchasing power, which after all is far more important to most of us than hyped stock markets and oil futures.
Given McDonald’s footprint — 38,000 restaurants in more than 100 countries as of late — it’s a pretty solid, if light-hearted, way of measuring commercial success. For example, in the latest index, we find that under-the-radar Switzerland, with its robust, prosperous economy, is charging $6.71 for the popular double patty. At the poorer end, the greasy tidbit costs just $2.28 in Romania and $1.76 in Venezuela, though that could change between writing and printing or even morning and night, given the latter country’s roller-coaster inflation rate of 167 to 3,000 percent pc
Burgernomics isn’t a precise art form, but then again, formal economic modeling hasn’t turned out to be much better, so who among us is going to provide the more accurate model? And that way you can eat the results, so it’s a win-win.
Looking at the process of combining meat, slices of cheese, bread, various sauces and so-called salad items, it combines labor costs, raw material production, import duties and taxes, not to mention the relationship between average income and food expenditure.
It’s a short hop to compare market exchange rates and determine if a currency is overvalued or undervalued relative to that other ubiquitous marker, the US dollar.
Therefore, news that McDonald’s is raising prices on some of its menu items after 14 years of stagflation might come as a shock to experts.
It’s not just the Big Mac. In an alarming revelation, the Chicken Mayo, McNuggets and even the McFlurry will all succumb to the ravages of biting inflation, and it’s the gorging fats that will suffer the most damage.
In a potentially sinister social experiment, the company said wraps and salads would be unaffected — by price hikes or customers, it seems.
Economists will spend sleepless nights tending McCoffees while still spending them among colored charts and (apple)pie charts while agonizing over the millionaire’s donut, and then advise customers to take their business elsewhere.
https://www.independent.ie/opinion/comment/burgernomics-is-by-far-the-best-indicator-of-how-were-faring-41886252.html Burgernomics is by far the best indicator of how we’re doing