Edward Conard

Top Ten New York Times Bestselling Author

  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
Upside of Inequality Oxford Unintended Consequences

AI Summary. Global currency misalignments are at their widest since the mid-1990s, driven by post-2021 U.S. inflation, an undervalued Chinese currency, and a weakening Japanese yen that has made consumer goods cheaper in Japan than in China.

Economist Staff The Economist
Date Posted:

American inflation since 2021, the “growing prominence of an undervalued Chinese yuan” and the “plunging yen” have left the Economist’s Big Mac Index measure of departures from PPP at its highest since the mid-1990s.

Are global currencies more misaligned than at any point in decades?

Core argument: GDP-weighted global Big Mac prices converged toward U.S. levels through the 2000s but have diverged sharply since 2010, with currency misalignments now at their widest since the mid-1990s.

Why does a Big Mac cost so much more in some countries than in others? [Many of the key factors are less about internal finance than about domestic supply and demand conditions that affect the price of nontradeables or “home goods.”] But nominal exchange rates are also a big part of the story. Currencies are once again moving out of whack. According to the Big Mac index, the world price of burgers (converted into dollars, then averaged across countries, weighted by their GDP) moved closer to the American price in the first decade of this century. But since 2010 it has once again diverged. Recent editions of the index show that currency misalignments in either direction are at their widest since the mid-1990s. American inflation after 2021 is one culprit. The growing prominence of an undervalued Chinese yuan is another. A third contributor is the plunging yen. Incredibly, it is now about 20% cheaper to buy a Big Mac in Japan than in China.

Takeaways by Macro Roundup® AI

  1. GDP-weighted global Big Mac prices converged toward U.S. levels through the 2000s but have diverged sharply since 2010, with currency misalignments now at their widest since the mid-1990s.
  2. The yen’s depreciation has pushed Japan’s Big Mac price approximately 20% below China’s, inverting a long-standing cost relationship between the two economies.
  3. U.S. post-2021 inflation, an undervalued Chinese yuan, and a depreciating yen are the three primary drivers of widening global burger-price disparities when converted to dollars.

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