Tricks to Beat Inflation

Ways to manage uncertain times with techniques that might surprise you.

You may have heard of the “Big Mac index”, a technique derived by The Economist to measure the purchasing power of a given currency and thereby evaluate whether the market exchange rates for different countries’ currencies are overvalued or undervalued. Have a look at this chart of global Big Mac prices in 2022:

Illustration by CashNetUSA (Data from 2022) under Creative Commons License.

Fast forward two years, at US$8.17, Switzerland currently has the most expensive Big Macs in the world (it has been sharing the top spot with Norway for several years) which seems a lot when compared to the price in the US at $5.69 — but is the Big Mac index really a good measure of so-called “purchasing power parity”¹?

Obviously it isn’t error proof and certainly has its limits². Factors like tax rates, wage regulations, whether components need to be imported, and the level of market competition all contribute to price variations between countries.

However, it does tell us an overall trend in the world: prices are going up (and have been doing so across the board for years³) — even for supposedly cheap items where one would probably least expect it.