The Big Mac index

The Big Mac index

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The Big Mac index
THIRTY-ONE years ago, The Economist created the Big Mac index as a way of gauging how different currencies stacked up against the dollar. The index is based on the theory of purchasing-power parity, the idea that in the long run, exchange rates should adjust so that the price of an identical basket of tradable goods […]
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The French government experiments with venture capitalism

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The French government experiments with venture capitalism
Don’t be coy, carp about the food AS A boy, Antoine Hubert used to catch butterflies. These days, the agro-engineer has eyes only for meal worms. In a demonstration factory near Dole in eastern France, he shows how trayfuls of plump, half-grown worms are fed, left to grow in a darkened dormitory, and then—after two […]
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Legacy airlines are facing new competitors on transatlantic routes

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Legacy airlines are facing new competitors on transatlantic routes
EVEN for a global industry like aviation, Primera Air’s business model seems remarkably cosmopolitan. The Icelandic-owned budget airline is headquartered in Latvia, but mainly operates low-cost flights from Denmark and Sweden to sunny places in the Mediterranean. This summer, it will begin long-haul flights from Britain and France to America. The company bears more than […]
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Having rescued recorded music, Spotify may upend the industry again

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Having rescued recorded music, Spotify may upend the industry again
IN JUST a few short years Spotify has evolved from bête noir of some of the world’s most prominent recording artists to perhaps their greatest benefactor. The Swedish company transformed the way people listen to music, and got them used to paying for it again after digital piracy had crippled sales. Global revenues from music […]
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Turkish Airlines bounces back to growth

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Turkish Airlines bounces back to growth
A LITTLE over a year ago, Gulliver gave a downbeat assessment of the prospects for Turkey’s aviation sector. Having enjoyed a decade of uninterrupted growth of more than 10% a year, Turkish Airlines, the country’s flag-carrier, was grounding aircraft and closing routes amid growing unrest at home and violence across its border with Syria. Concerns […]
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Companies are moving faster than many governments on carbon pricing

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Companies are moving faster than many governments on carbon pricing
Disney offsets its air miles ECONOMISTS have long argued that the most efficient way to curb global warming is to put a price on the greenhouse-gas emissions that cause it. A total of 41 OECD and G20 governments have announced either a carbon tax or a cap-and-trade scheme, or both. Add state and local schemes, […]
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After a bumper 2017, will 2018 be kind to the financial markets?

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After a bumper 2017, will 2018 be kind to the financial markets?
AFTER a bumper year for financial markets in 2017, can 2018 be anything like as good? Much will depend on the global economy. The rally in stockmarkets stretches back almost two years, to the point when worries about an era of “secular stagnation” started to diminish. The first pieces of economic data to be published […]
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Canada frets about anonymously owned firms

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Canada frets about anonymously owned firms
WHEN reports surfaced in 2016 of foreign students with no known income buying homes worth millions of dollars in Vancouver, locals said it was yet more evidence that foreigners were inflating prices in Canada’s dearest property market. It was also evidence of a home-grown problem. The students turned out to be figureheads for anonymous firms […]
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China’s Ant Financial is obliged to abandon an American acquisition

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China’s Ant Financial is obliged to abandon an American acquisition
It didn’t mean jack “THE geopolitical environment has changed considerably since…a year ago.” That was the explanation given this week by Alex Holmes, chief executive of MoneyGram International, a Dallas-based American money-transfer firm, for Ant Financial abandoning its $1.2bn deal to buy his firm. Ant, the online-payments affiliate of Alibaba Group, a Chinese e-commerce giant, […]
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Where did the inflation go?

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Where did the inflation go?
THE strength of the global economy is one reason why the stockmarket has started 2018 in a buoyant mood (with the Dow passing 25,000). At some point, in any expansion, businesses find it harder to recruit workers or get the materials they need; these bottlenecks cause wages and prices to rise. Central banks then start […]
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Intangible assets are changing investment

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Intangible assets are changing investment
WHEN you work as an equity analyst at an investment bank, your task is clear. It is to comb all the statements made by corporate executives, to scour the industry trends and arrive at an accurate forecast of the company’s profits. Achieve this and your clients will be happy and your bonus cheque will have […]
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Have yourself a dismal Christmas

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Have yourself a dismal Christmas
ONLY an economist would think to ask whether Christmas is efficient. In 1993 Joel Waldfogel, then a professor at Yale University, turned a lunchtime conversation with colleagues into a paper entitled “The deadweight loss of Christmas”, which argued that, no, it is not. That gift-giving might actually be bad is the kind of opinion which […]
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Russia’s dysfunctional funeral business gets a makeover

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Russia’s dysfunctional funeral business gets a makeover
Stiffer competition is coming THE calls began shortly after Yulia’s grandmother died. The undertaker offered help arranging the funeral, for 47,000 roubles ($800) in cash. She then travelled to Moscow’s Khovanskoe Cemetery, where she was offered a discount on a gravesite—150,000 roubles off—if she could bring cash within three hours and sign a receipt saying […]
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An experiment with in-home deliveries is under way

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An experiment with in-home deliveries is under way
AFTER staying at home one afternoon for a delivery of discounted toilet disinfectant that never came, Valentin Romanov, a Stockholm IT manager, installed a special lock on his flat’s entrance. When no one is in, deliverymen unlock the door and slip packages inside. Four months on, Mr Romanov has doubled his spending online and says […]
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Hard lines

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Hard lines
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What 2018 has in store for the markets

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What 2018 has in store for the markets
WHAT is in store for economies and markets in 2018? Around this time of year, a large number of analysts and fund managers are giving their views. Among the most interesting and thoughtful approaches can be found at Absolute Strategy Research (ASR), an independent group founded by David Bowers and Ian Harnett. ASR adds extra […]
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Not even “The Last Jedi” will reverse Americans’ retreat from cinemas

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Not even “The Last Jedi” will reverse Americans’ retreat from cinemas
THE new “Star Wars” film opens this week. “The Last Jedi” arrives in cinemas in time to boost expected ticket sales for the year to about $11bn in America, only slightly down from last year’s record. But the American film industry is in trouble. Tickets sold per person have declined to their lowest point since […]
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The Santa clause

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The Santa clause
DEAR Team, I trust you are looking forward to your vacations and that the spirit of love and generosity infuses your family gatherings. I also hope that this spirit will be left next to the Christmas tree when you return to work at this incredible company on January 2nd. Because 2018 is going to be […]
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Donald Trump holds off hitting the Gulf carriers with sanctions

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Donald Trump holds off hitting the Gulf carriers with sanctions
WHEN Donald Trump became America’s president nearly a year ago, lobbyists campaigning for protection for the country’s airlines against competition from the Middle East were overjoyed. But they were less happy on December 13th when it was revealed that Donald Trump has decided to hold off on imposing sanctions against the three big Gulf carriers—Emirates […]
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Companies in the region vote with their feet against political uncertainty

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Companies in the region vote with their feet against political uncertainty
Employees, customers, separatists “WE ARE used to dealing with political crises, but not a break in the rule of law,” says the boss of a big Barcelona cement firm, of Catalonia’s constitutional crisis. Fearing separatists in the region would declare independence, as they did on October 27th, he shifted its headquarters to Madrid. That ended […]
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Western companies are getting creative with their Chinese names

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Western companies are getting creative with their Chinese names
MCDONALD’S drew ridicule in China when it changed its registered name there to Jingongmen, or “Golden Arches”, in October, after it was sold to a Chinese consortium. Some on Weibo, a microblogging site, thought it sounded old-fashioned and awkward, others that it had connotations of furniture. The fast-food chain was quick to reassure customers that […]
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British Airways’ franchisee in South Africa throws off two black passengers

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British Airways’ franchisee in South Africa throws off two black passengers
IN THE latest—and possibly most alarming—in a recent string of allegations of racism against airlines, two black musicians claim they were downgraded from business class on a British Airways-branded flight in South Africa to make room for a white woman. Thabo Mabogwane and Bongani Mohosana, a South African musical duo known as Black Motion, purchased […]
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Putting a price on Bitcoin

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Putting a price on Bitcoin
SCENE: A pet shop with a bored looking proprietor. A customer approaches CUSTOMER: I’d like to buy a parrot. OWNER: Certainly, sir. How about this one? It’s a Norwegian Blue. Beautiful plumage. CUSTOMER: It’s not moving much OWNER: It is tired and shagged out after a long squawk CUSTOMER: Fair enough. How much is it? […]
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The markets believe in Goldilocks

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The markets believe in Goldilocks
ANOTHER week, another record. The repeated surge of share prices on Wall Street is getting monotonous. The Dow Jones Industrial Average has passed another milestone—24,000—and the more statistically robust S&P 500 index is up by 17% so far this year. Emerging markets have performed even better, as have European shares in dollar terms (see chart). […]
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In the Trump era, big business is becoming more political

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In the Trump era, big business is becoming more political
AT THE start of Donald Trump’s presidency bosses rushed onto his business councils, hoping to influence policies in their favour. Their ardour has cooled. When Mr Trump banned travel from Muslim-majority countries, withdrew from the Paris agreement on climate change and equivocated on racist protesters in Charlottesville, to name but a few occasions, chief executives […]
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Tech giants will probably dominate speakers and headphones

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Tech giants will probably dominate speakers and headphones
MUSIC lovers do not typically go to the opera to buy a speaker. But at the Palais Garnier in Paris they now can: Devialet, a local maker of high-end speakers, on November 29th opened a store in the 19th-century music venue to sell its most sophisticated product, called Phantom. Looking like a dinosaur egg, this […]
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Germans get little in reward for booking their flights early

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Germans get little in reward for booking their flights early
HOW far in advance should you book a flight to get the best price? That is a question that many travellers agonise about. Yet people around the world do not respond in the same way to the incentives they are given. New data from Concur, a travel-software firm, compares flight-booking trends from five countries. Their […]
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