Advantages and Disadvantages of Methods for Measuring Inflation: Big Mac and Olivier Indexes Cases

Abstract

The Big Mac Index is a well—known indicator of purchasing power parity developed by The Economist. Meanwhile, the Russian Olivier index is a similar index used in Russia to track inflation rates. Using statistical analysis methods, as well as analysis of the methodology for calculating indices, the inflation levels measured by these indices will be compared with official government inflation data from different countries. The study will also examine the advantages and disadvantages of each index, their suitability for use in various economic conditions and the consequences of their use. The results of the study will contribute to the ongoing discussions about the effectiveness of various methods of measuring inflation and will serve as a basis for future research in this area.