this is how the dollar should be in Argentina / Argentina News

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Mexico is the country where the Big Mac hamburger has the lowest price, while Uruguay is where this product is more expensive

The so-called Big Mac index refers to that indicator invented by The Economist as a guide to know if the currencies or economies of a country are at their correct level.

This is based on the theory of purchasing power parity that reflects the idea that exchange rates should move towards a rate that would equalize the prices of an identical basket of goods and services or, in this case, of a McDonald’s hamburger in different countries given the presence of the brand all over the world.

And it is that since a Big Mac should be identical in all countries, it represents an adequate control variable to analyze price differences and thus have an idea of ​​how the economy and purchasing power of a certain region are compared to others. and with previous years.

Speaking of the index, recently The Economist published the most updated version of the indicator and for the region that includes Latin America, the image we present today reveals the situation in the different countries to date.

Argentina is the fifth country with the most expensive Big Mac

Currently Uruguay is the country where the Big Mac has the highest cost, registering an amount of US $ 4.8, the same figure that remains in comparison with 2020.

Subsequently, Chile qualifies as the second country where this McDonald’s product has a higher cost, reaching US $ 4.1, with a variation of + 20% compared to 2020, indicates the Merca2.0 site.

A third position is held by Brazil with a cost of US $ 4, after a decrease of 17% compared to 2020, and closing the first 5 positions with the highest cost of the Big Mac are Costa Rica and Argentina (US $ 3 , 75 according to Statista), the latter being the country where the cost increased the most compared to 2020, it rose 32%.

How much should the dollar be

According to the survey completed at the end of December 2020, in Argentina, the price of the Big Mac was $ 320, against $ 5.66 in the United States.

According to the ranking, the implicit exchange rate is $ 56.54. In other words, that’s what the dollar should be worth in Argentina to match prices based on the cost of the Big Mac.

According to The Economist, if a wholesale dollar price in Argentina is considered – which is around $ 85 – the Argentine peso is undervalued by 33.8%. Another way of looking at it: the dollar should drop that percentage to reach its “correct” value according to the Big Mac index.

According to the Big Mac index, the dollar is

According to the Big Mac index, the dollar is “overvalued” in Argentina.

The Argentine “Big Mac gate”

During the years in which the Kirchnerist government sought to deny inflation and the indices published by the then Secretary of Internal Commerce, Guillermo Moreno, did not seem to reflect the reality of the country, the Big Mac index was one of the few resources they had. economists to have a more consistent view.

In July 2011, the Big Mac index reflected that in Argentina the sandwich in question was paid at $ 4.84, which was equivalent to about $ 20 at that time, compared to $ 4.07 in the United States.

In other words, in the country, the Big Mac was overvalued by 19.1%. This implied that the dollar that was selling for $ 4.13 must actually cost $ 4.92.

The government reacted and the Big Mac stopped being displayed as an option on the premises and its price stagnated at $ 21 for three years.

Know the value of the dollar in Dollar Today and followed the price and behavior minute by minute. CLICK HERE

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