‘Big Mac’ index illustrates price adjustment slow-up

The price of a Big Mac is on the way up in Ireland again and illustrates that the price adjustment between euro area countries has begun to slow down.

The Big Mac index is used by economists to illustrate real price differences and movements between countries in the eurozone.

From the beginning of the euro crisis, Big Mac prices moved in different directions and at a different pace in the various countries, as costs came down while countries tried to regain competitiveness. The price reduction of 30 cents in Ireland in 2011 brought the cost of a Big Mac to around €3.35. The size of the reduction was second only to Greece’s 58 cent reduction, to around €2.50 in this, the hardest-hit economy.