Anold beef is again dividing the world of international finance: the spectre of "currency wars". Jens Weidmann, the head of Germany's Bundesbank, recently fretted that central-bank efforts to revive flagging economies could lead to an "increasing politicisation of exchange rates". Bill Gross of pimco, a huge bond-fund manager, reckons the world is entering a spiral of competitive devaluations reminiscent of the 1930s, as economies anxious for growth massage their currencies downward to give exporters a boost. What does burgernomics have to say? The Big Mac index is The Economist's lighthearted analysis of foreign-exchange rates. Its secret sauce is the theory of purchasing-power parity (ppp), according to which prices and exchange rates should adjust over the long run, so that identical baskets of tradable goods cost the same across countries.
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