Currency values, prices, consumption and incomes are at the heart
of the economic performance of all countries. In order to make a
meaningful comparison between one economy and another, economists
routinely make use of purchasing power parity (PPP) exchange rates,
but while PPP rates are widely used and well understood, they take
a lot of effort to produce and suffer from publication delays.
Currencies, Commodities and Consumption analyses the strengths and
weaknesses of two alternatives to PPP. Firstly, the so-called Big
Mac Index, which uses hamburger prices as a standard of
measurement, and second, a less well known technique which infers
incomes across countries based on the proportion of consumption
devoted to food. Kenneth W. Clements uses international
macroeconomics, microeconomic theory and econometrics to provide
researchers and policy makers with insights into alternatives to
PPP rates and make sense of the ongoing instability of exchange
rates and commodity prices.