Aplikácia parity kúpnej sily prostredníctvom indexu Big Mac
Use of Purchasing Power Parity through the Big Mac Index

Summary/Abstract: This paper deals with purchasing power parity tests using the Big Mac index. A good example of price comparison among countries is the Big Mac index, which represents a unique basket of goods and services in any two countries. Exchange rate between the US dollar and Slovak koruna has been evaluated for 11 years (between January 1993 and January 2004). The results show that the Slovak koruna was undervalued in average by 36 % in this time period. This undervaluation is an important positive factor for foreign companies investing to Slovakia. Price differences among countries from the theoretical values of PPP are also influenced by barriers to trade, transportation costs, taxes, differences in productivity, current account deficits and imperfect competition of markets.

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