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The Big Mac index was invented by The Economist in 1986 as a lighthearted guide to whether currencies are at their “correct” level. It is based on the theory of purchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalize the prices of an identical basket of goods and services (in this case, a burger) in any two countries. Please choose Big Mac index for five currencies from 2012 to 2016 and analyze the behavior of each currency index over this period, and determine if it`s overvalued or undervalued. (using descriptive statistics and graphs).
You can use the address for the following web site to start your analysis:
https://www.economist.com/content/big-mac-index
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