July 26, 2004

You are on the invidual archive page of The value of money. Click Simon World weblog for the main page.
The value of money

Last week Brad DeLong picked up my story on the Two China's, being the difference between the rapidly growing and comparitively wealthy coast and the poor and stagnant rural areas. The comments at his site had an interesting discussion including such econo-speak as purchasing power parity and the Big Mac Index. The point some were trying to make was that a dollar in China is worth more in terms of what it can buy you than what it does in (say) the USA. It's a fair point and one the economists spend a lot of time working on to establish relative standards of living and meaningful comparisons between countries.

Stephen Frost has an interesting alternative way of looking at the problem of determining the value of money: he looks at a comparison of minimum wages to determine what 625 yuan (the benchmark for "extreme" poverty in China). It re-emphasises my main original point: 625 yuan is not a lot of money under any circumstances.

It has lead Stephen into trying to construct a new alternative Big Mac Index, this time based on how long it takes a McDonald's worker to earn enough to buy a Big Mac. It's an ingenious twist on the original and I highly commend you sacrifice yourself one lunchtime to help him out. I'd do it myself but Stephen's a Hong Konger already. Volunteers please - any location accepted.

UPDATE: Manilla results are in.

posted by Simon on 07.26.04 at 11:56 AM in the


TrackBack URL for this entry:

Send a manual trackback ping to this post.

Carnival of the Capitalists
Excerpt: Welcome to this weeks edition of Carnival of the Capitalists! Thank you for stopping by! We've got a long this week, so grab a cup of coffee, or two, and enjoy! Todd at A Penny For posted about the BlogOn conference and comes home with as many question...
Weblog: Business Evolutionist
Tracked: August 2, 2004 07:42 PM


Post a Comment:


Email Address:



Remember your info?