A Tale of Two Indexes
The Economist has long used an index to compare the purchasing power of currencies using local prices of Big Macs. In July, Nomura introduced its own index using the iPhone 6S. They clash. In the countries shown, Big Macs cost less than in the U.S. at today’s exchange rates, which indicates their currencies are undervalued. But iPhones cost more abroad, indicating those same currencies are overvalued.