How do poor nations get rich?
The world's nations are diverse in ways that defy easy comparisons. But at least 118 of them share something similar. They have a McDonald's. This matters to economists, because McDonald's offers an international apples-to-apples comparison of wages and prices.
Ashenfelter comes up with a clever way to measure wage growth, or purchasing power parity, across the globe. By recording wages and Big Mac prices over time, he computes how many Big Macs one can buy on an hour's salary in the U.S. vs. Western Europe vs. the developing world. Tracking Big-Macs-per-hours-worked, he says, should tell us who's really rich, who's getting rich, and who's not.
But today, McDonald's and the Big Mac are both a symbol of our wealth and tool for comparing wealth, burger-to-burger, across time. That iconic double-decker, 500-calorie sandwich enriches us in more ways than one.