ming xia

Ming Xia

A STUDY OF CULTURAL CONVERGENCE FROM PURCHASING POWER PARITY

PERSPECTIVE

--- MORE EVIDENCE FROM WINDOWS VISTA INDEX

INTRODUCTION

When Euro was first launched on 1 January 1999, against all odds, “Big Mac Index”(BMI) created by The Economist Magazine was one of the few who predicted thedepreciation of Euro. This success triggered an international applause of Big Mac Indexas a light-hearted assessment to measure purchasing power parity. The index is basedon the law of one-price. In this case, a basket of goods is replaced with one product –the Big Mac hamburger which is sold in 119 countries. By converting the local prices intoUS dollars (USD) then compared with real exchange rate, Big Mac index uncovers thearbitrage opportunities exist between a particular country and United States.

However, BMI is far from perfect. One could easily assume the change in businessenvironment since 1986. What once a good indicator of a country’s PPP may not has thesame representative status in this IT age. The change in global business environmentmay require a product what is constantly self-updating. Low price of Big Mac with therange of US$1.42 to US$4.601 will magnify a slight price differences between countriesgenerating a large percentage error of the BMI. The change in eating habits furthercomplicates the issue (Sonestedt, Wirfält, Gullberg and Berglund 2007).In addition,some cultures and religions have second thoughts about cows. Therefore, a largepercentage of the Muslim and Hindu communities have to be excluded from BMI.

The academia has also long being doubtful about this index, particularly on theexistence of non-tradable component in the production cost (Pakko and Pollard 1996) aswell as apparent component (beef) cost difference in a standardized product (Li 1997).Many attempts have been made to improve the index, from the “Tall Latte Index2”created by The Economist itself, to the Apple iPod Index by the Commonwealth Bank ofAustralia and eventually to the Game Console Index (Cox 2008). The paradigm hasshifted from food items to high-tech products.

1 Source: The Economist2 Lattenomics, The Economist,http://www.economist.com/finance/displaystory.cfm?story_id=E1_NPGTDSN

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Ming Xia

However, the manufacturing cost of iPod is still considerably high (40%3), not tomention the transportation cost required. In addition, the stiff competition in the high-tech electronics market in developed countries might force retailers to cut their margin.On the other hand, due to fewer brands available in the developing nations, may allowthe retailers to price them at higher price. This combined effect on market availabilitymay undervalue the developed country currencies, while overvalue developing countrycurrencies.

Software industry usually requires a massive investment in centralized R&D (In 2007,Microsoft spent $6.2 billion on R&D4), while the manufacturing and packaging cost couldbe effectively reduced to near zero after mass production. Furthermore, software likeoperating systems (OS) have little component disparity as it is the platform where otherprogram will rely on – maximum compatibility is required. This effectively removedpossibility for disparity in components. These unique factors make software products aconvincing candidate for evaluating PPP and cultural convergence.

This paper aims to explore the interaction between purchasing power parity andcultural convergence using of software products instead of Fast-food products inmeasuring global purchasing power parity. Microsoft’s Windows Vista Home BasicOperation System is chosen to represent the software products. The rationale will bediscussed in the following chapter.

A similar methodology to the famous “Big Mac Index” is adopted here for a faircomparison between software products with fast-food products. To ensure the validityof our analysis results for individual countries, a combination of validation methods wasemployed – Sensitivity analysis and Triangulation process.

METHODOLOGY

The prices of Window Vista Home Basic (WV) packaged edition in each country wasobtained by calling the respective customer service centers of Microsoft Company ofeach country within two days5. This short time frame avoids data inaccuracy due topricing policy changes. There are X countries in our sample, Table 1 shows the detailedanalysis of all countries investigated.

Data on currency exchange rates used in this study was taken directly from Bloombergand presented in indirect terms (stated values demonstrate how much of the respectivecurrency can be bought with 1 USD6). All exchange rates were taken as the daily closing

3 Ryan Block, Your $200 iPod nano costs about $90 to make,http://www.engadget.com/2005/09/23/your-200-ipod-nano-costs-about-90-to-make/4 http://blog.searchenginewatch.com/060602-0852385 Two dates are 31 Dec 2008 and 1 Jan 2009.6 To convert values into direct figures showing the amount of US dollars that can be purchased with oneunit of a particular currency, a reciprocal of the numbers shown may be done.

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Global Initiatives Symposium in Taiwan 2009

Ming Xia

A STUDY OF CULTURAL CONVERGENCE FROM PURCHASING POWER PARITY

PERSPECTIVE

--- MORE EVIDENCE FROM WINDOWS VISTA INDEX

INTRODUCTION

When Euro was first launched on 1 January 1999, against all odds, “Big Mac Index”(BMI) created by The Economist Magazine was one of the few who predicted thedepreciation of Euro. This success triggered an international applause of Big Mac Indexas a light-hearted assessment to measure purchasing power parity. The index is basedon the law of one-price. In this case, a basket of goods is replaced with one product –the Big Mac hamburger which is sold in 119 countries. By converting the local prices intoUS dollars (USD) then compared with real exchange rate, Big Mac index uncovers thearbitrage opportunities exist between a particular country and United States.

However, BMI is far from perfect. One could easily assume the change in businessenvironment since 1986. What once a good indicator of a country’s PPP may not has thesame representative status in this IT age. The change in global business environmentmay require a product what is constantly self-updating. Low price of Big Mac with therange of US$1.42 to US$4.601 will magnify a slight price differences between countriesgenerating a large percentage error of the BMI. The change in eating habits furthercomplicates the issue (Sonestedt, Wirfält, Gullberg and Berglund 2007).In addition,some cultures and religions have second thoughts about cows. Therefore, a largepercentage of the Muslim and Hindu communities have to be excluded from BMI.

The academia has also long being doubtful about this index, particularly on theexistence of non-tradable component in the production cost (Pakko and Pollard 1996) aswell as apparent component (beef) cost difference in a standardized product (Li 1997).Many attempts have been made to improve the index, from the “Tall Latte Index2”created by The Economist itself, to the Apple iPod Index by the Commonwealth Bank ofAustralia and eventually to the Game Console Index (Cox 2008). The paradigm hasshifted from food items to high-tech products.

1 Source: The Economist2 Lattenomics, The Economist,http://www.economist.com/finance/displaystory.cfm?story_id=E1_NPGTDSN

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METHODOLOGY




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Bliss or Misery? Contemplating the Engagement of Cultural Forms and Economic Progress

price at 1 Jan 2009 to investigate the latest currency valuation while allowing ampletime for back-testing.

The implied PPP of the dollar is calculated by dividing the local WV price against theprice in United States. This Vista PPP is the exchange rate that would equate the pricesof WV in America as elsewhere. The implied exchange rate is compared to the actualmarket exchange rate between these currencies to determine if the relevant currency isunder or overvalued7, as presented in the final column. A figure of 0 indicates a fairmarket valuation for the respective currency in line with strict PPP, figures below 0indicates currency undervaluation and vice-versa8.

This index is the technical equivalent of BMI in that it calculates PPP exchange ratessimply by comparing the local currency prices against the US prices. This hence allows afair comparison between BMI and WVI.

RESULTS AND ANALYSIS

In Appendix 1, we have listed all the countries investigated. Among them, the PeruvianNuevo Sol is the most undervalued currency (-76.07%), followed by the Chinese RMB (-63.43%), On the other hand, the most overvalued currency is the Hungarian Forint(125.02%). Generally, the currencies of developing countries are generally undervalued.On the other hand, the Euro seems overvalued, still. It is interesting to note that withingeographically close regions, valuations tend to be similar, namingly Malaysia (-42.06%)and Indonesia (-52.24%), as well as US (base currency) and Canada (6.55%). Thissuggests the existence of certain degree of pricing and cultural convergence across theimmediate boarder.

ACCURACY COMPARISON BETWEEN BIG MAC INDEX AND WINDOWS VISTA INDEX

We computed the absolute difference of Vista’s valuation and Big Mac’s valuation fromthe actual change in the exchange rates between 1 Jan 09 and 2 Feb 09. This allows usto compare the predictivity of Vista Index as well as Big Mac Index. The last two columns

7 These terms are used in the same sense as BMI, according to PPP theory which argues that in the longrun, exchange rates should move towards levels that would equalize prices of an identical basket of goodsbetween any 2 countries.

Realistically however, the market exchange rates will deviate to an extent from strict PPP. Markets shouldbe assumed to adjust exchange rates to equalize prices of individual goods or any market baskets.

8 For example: Canadian dollar is overvalued by 100* [(259/200)-1.22]/1,22 = 6.55%

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Ming Xia

price at 1 Jan 2009 to investigate the latest currency valuation while allowing ampletime for back-testing.

The implied PPP of the dollar is calculated by dividing the local WV price against theprice in United States. This Vista PPP is the exchange rate that would equate the pricesof WV in America as elsewhere. The implied exchange rate is compared to the actualmarket exchange rate between these currencies to determine if the relevant currency isunder or overvalued7, as presented in the final column. A figure of 0 indicates a fairmarket valuation for the respective currency in line with strict PPP, figures below 0indicates currency undervaluation and vice-versa8.

This index is the technical equivalent of BMI in that it calculates PPP exchange ratessimply by comparing the local currency prices against the US prices. This hence allows afair comparison between BMI and WVI.

RESULTS AND ANALYSIS

In Appendix 1, we have listed all the countries investigated. Among them, the PeruvianNuevo Sol is the most undervalued currency (-76.07%), followed by the Chinese RMB (-63.43%), On the other hand, the most overvalued currency is the Hungarian Forint(125.02%). Generally, the currencies of developing countries are generally undervalued.On the other hand, the Euro seems overvalued, still. It is interesting to note that withingeographically close regions, valuations tend to be similar, namingly Malaysia (-42.06%)and Indonesia (-52.24%), as well as US (base currency) and Canada (6.55%). Thissuggests the existence of certain degree of pricing and cultural convergence across theimmediate boarder.

ACCURACY COMPARISON BETWEEN BIG MAC INDEX AND WINDOWS VISTA INDEX

We computed the absolute difference of Vista’s valuation and Big Mac’s valuation fromthe actual change in the exchange rates between 1 Jan 09 and 2 Feb 09. This allows usto compare the predictivity of Vista Index as well as Big Mac Index. The last two columns

7 These terms are used in the same sense as BMI, according to PPP theory which argues that in the longrun, exchange rates should move towards levels that would equalize prices of an identical basket of goodsbetween any 2 countries.

Realistically however, the market exchange rates will deviate to an extent from strict PPP. Markets shouldbe assumed to adjust exchange rates to equalize prices of individual goods or any market baskets.

8 For example: Canadian dollar is overvalued by 100* [(259/200)-1.22]/1,22 = 6.55%

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indicate the absolute difference of Windows Vista Index and Big Mac Index from actual.Absolute values are taken to eliminate trend biasness.9.

Table 1: Comparison between Window Vista Index and Big Mac Index in reality

Country VistaPrice(USD)

VistaIndex

2009-1-1

Big MacPrice(USD)

Big MacIndex

2009-1-1

Exchangerate

2009-1-1

Exchangerate

2009-2-2

%changeof USD

AbsoluteDifference

from Actual

Vista Big MacG8 US 200 Nil 3.57 Nil Nil Nil Nil Nil Nil

Canada 213 6.55% 4.08 14.30% 1.22 1.24 -2.00% 0.05 0.12Euro 271 34.76% 5.34 49.60% 90.74 89.45 -8.54% 0.26 0.41Japan 299 49.29% 2.62 -26.60% 29.15 36.13 1.44% 0.51 0.25Russia 235 17.36% 2.54 -28.90% 0.68 0.70 -

19.33%0.02 0.48

UK 200 -0.19% 4.57 28.00% 0.71 0.78 -2.80% 0.03 0.25

NICs China 73 -63.43% 1.83 -48.70% 9.48 10.13 -0.37% 0.64 0.49India 103 -48.72% Nil Nil 13.71 14.42 -0.33% Nil Nil

Mexico 159 -20.65% 3.15 -11.76% 2.32 2.31 -4.87% 0.26 0.17Brazil 193 -3.66% 4.73 32.50% 6.83 6.85 0.13% 0.04 0.33

Malaysia 116 -42.06% 1.7 -52.39% 48.77 48.93 -4.15% 0.46 0.57Philippines 174 -13.17% 1.96 -45.10% 3.47 3.62 -0.42% 0.14 0.46

Thailand 188 -6.20% 1.86 -47.90% 47.52 47.72 -0.54% 0.07 0.48Turkey 123 -38.54% 4.32 21.00% 34.78 34.97 -6.74% 0.45 0.14SouthAfrica

137 -31.68% 2.24 -37.30% 1.54 1.65 -6.51% 0.38 0.44

Sum 3.29 4.59 Source: Bloomberg, Microsoft Co.

Big Mac index seems to agree with Vista Index on Canada dollar and Euro for theirovervaluation, as well as most of NIC currencies for their undervalued status. However,they disagree on Russia, Japan, Brazil and Thailand.

In general, the Microsoft Vista Index has an absolute difference from actual fact by 3.29,while Big Mac Index is 4.59. The improvement is about 39%. This improvement inaccuracy could due to the superior nature of software products in terms of internationaltrade.

9 Because positive figure in valuation indicates a tendency to devaluate, therefore we uses the Vista or BigMac valuation to plus the actual difference in exchange rate to obtain the absolute difference

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G8 VS NICS (NEWLY INDUSTRALISED COUNTRIES)

Figure 1: Plot of WVI vs GDP per capita

Source: Bloomberg, IMF

*Radius of the circle is proportional to the GDP per capita of individual country.

From figure 1, it is apparent that G8 countries are concentrated on the right hand sideof the valuation chart; while NICs are disperse on the left hand side. This is becauseunder the current recessionary environment, emerging country currencies seem greatlyundervalued (average: -29.79%) [See appendix 1], while developed world seems moreovervalued (average: 21.55%). From macroeconomic level, this is probably due torepatriation of funds from developing countries to developed world where investorshave more confidence or eminent demand for cash to clear the balance sheet. This hasincreased the demand for developed country currencies, which results a superiorexchange rate.

Most interestingly, among G8, Russia has similar level of GDP per capita as Mexico,Turkey and Malaysia. However, Russian Ruble is overvalued as other G8 countrycurrencies by 17.36% on its own. This abnormality suggests that Russian Rouble is likelyto adjust its position to reach an equilibrium state.

At the beginning of 2009, Russian Ruble tumbled by 19.33% (Source: Bloomberg) just inJanuary alone. (as indicated by the red arrow) This is probably caused by the sharp drop

CanadaJapan

Russia

UK

Euro Zone

South Africa

Mexico

Brazil

ChinaIndia

Malaysia

Philippines

Thailand

Turkey

(5,000)

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

-80.00% -60.00% -40.00% -20.00% 0.00% 20.00% 40.00% 60.00%

GD

P Pe

r ca

pit

a

Valuation

Valuation vs GDP per capita

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in oil price from its peak at $145.8510 per barrel to $47.7511 per barrel. As its new foundmight, oil has been the main thrust for economic growth in Russia for past few years.However, the deepening of financial crisis, especially in the automobile industry, has ledoil price to plunge.

Rouble’s new position on 2 Feb 2009 matches the level as Mexico, Turkey and Malaysia.In theory, the likelihood of Russian Rouble to stabilize at current level is high. In fact,during February 2009, Russian Rouble only depreciated by 0.12% (Source: Bloomberg).This further justifies the accuracy of our model.

This classification of currency valuation and the movement of Russian Ruble suggest tous that PPP is still greatly influenced by the economic level of a country. The law of one-price may not stand though in today’s environment. This model also suggests that thelaw of one-price may be modified into law of two prices, adjusting to the level ofclassification of GDP per capita. This could be an interesting area for further research.

CONCLUSION

In this paper, we have demonstrated the use of Window Vista OS as a better choice toBig Mac in currency valuation. MVI deviates from actual rates by 3.29, compared toBMI’s 4.59, implying an improvement in accuracy of about 39%. In general, emergingcountry currencies seem greatly undervalued (average: -29.79%), while currencies of thedeveloped world seems more overvalued. The greater accuracy of WVI also implies theimportance of software in globalization.

All the above have proven the existence of pricing arbitrage among richer countries andless developed nations. Even though one may argue that there is certain degree ofcultural and pricing convergence at broad, large discrepancies still exist in countries withdifferent economic levels. The undervaluation of emerging country currencies mayenhance the competency of their products; however, on the other hand, it might be fairto their land.

10 on 3 July 2008

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G8 VS NICS (NEWLY INDUSTRALISED COUNTRIES)

Figure 1: Plot of WVI vs GDP per capita

Source: Bloomberg, IMF

*Radius of the circle is proportional to the GDP per capita of individual country.

From figure 1, it is apparent that G8 countries are concentrated on the right hand sideof the valuation chart; while NICs are disperse on the left hand side. This is becauseunder the current recessionary environment, emerging country currencies seem greatlyundervalued (average: -29.79%) [See appendix 1], while developed world seems moreovervalued (average: 21.55%). From macroeconomic level, this is probably due torepatriation of funds from developing countries to developed world where investorshave more confidence or eminent demand for cash to clear the balance sheet. This hasincreased the demand for developed country currencies, which results a superiorexchange rate.

Most interestingly, among G8, Russia has similar level of GDP per capita as Mexico,Turkey and Malaysia. However, Russian Ruble is overvalued as other G8 countrycurrencies by 17.36% on its own. This abnormality suggests that Russian Rouble is likelyto adjust its position to reach an equilibrium state.

At the beginning of 2009, Russian Ruble tumbled by 19.33% (Source: Bloomberg) just inJanuary alone. (as indicated by the red arrow) This is probably caused by the sharp drop

CanadaJapan

Russia

UK

Euro Zone

South Africa

Mexico

Brazil

ChinaIndia

Malaysia

Philippines

Thailand

Turkey

(5,000)

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

-80.00% -60.00% -40.00% -20.00% 0.00% 20.00% 40.00% 60.00%

GD

P Pe

r ca

pit

a

Valuation

Valuation vs GDP per capita

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in oil price from its peak at $145.8510 per barrel to $47.7511 per barrel. As its new foundmight, oil has been the main thrust for economic growth in Russia for past few years.However, the deepening of financial crisis, especially in the automobile industry, has ledoil price to plunge.

Rouble’s new position on 2 Feb 2009 matches the level as Mexico, Turkey and Malaysia.In theory, the likelihood of Russian Rouble to stabilize at current level is high. In fact,during February 2009, Russian Rouble only depreciated by 0.12% (Source: Bloomberg).This further justifies the accuracy of our model.

This classification of currency valuation and the movement of Russian Ruble suggest tous that PPP is still greatly influenced by the economic level of a country. The law of one-price may not stand though in today’s environment. This model also suggests that thelaw of one-price may be modified into law of two prices, adjusting to the level ofclassification of GDP per capita. This could be an interesting area for further research.

CONCLUSION

In this paper, we have demonstrated the use of Window Vista OS as a better choice toBig Mac in currency valuation. MVI deviates from actual rates by 3.29, compared toBMI’s 4.59, implying an improvement in accuracy of about 39%. In general, emergingcountry currencies seem greatly undervalued (average: -29.79%), while currencies of thedeveloped world seems more overvalued. The greater accuracy of WVI also implies theimportance of software in globalization.

All the above have proven the existence of pricing arbitrage among richer countries andless developed nations. Even though one may argue that there is certain degree ofcultural and pricing convergence at broad, large discrepancies still exist in countries withdifferent economic levels. The undervaluation of emerging country currencies mayenhance the competency of their products; however, on the other hand, it might be fairto their land.

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APPENDIX 1: EVALUATION OF WINDOWS VISTA INDEX VS ACTUAL EXCHANGE RATE

Source: Bloomberg, Microsoft Co.

12 The retail price for Euro Area is taken as the average retail price of the area.

Vista Index Impliedppp of

the dollar

ActualExchange Rate

01/01/09

Under / overValuationLocal Currency in dollars

United States 200 - - -Australia 299 212 1.50 1.41 6.05%

Britain 137 200 0.69 0.69 -0.19%Canada 260 213 1.30 1.22 6.55%China 499 73 2.50 6.82 -63.43%

Euro Area12 194 271 0.97 0.72 35.40%India 5000 103 25.01 48.77 -48.72%

Hong Kong 1700 219 8.50 7.75 9.70%Hungary 84990 450 425.06 188.90 125.02%

Indonesia 1060000 95 5301.33 11100.00 -52.24%Japan 27090 299 135.48 90.75 49.29%Kenya 7600 97 38.01 78.62 -51.65%

Malaysia 400 116 2.00 3.45 -42.06%New Zealand 337 198 1.68 1.70 -0.96%

Norway 1955 282 9.78 6.92 41.27%Peru 150 48 0.75 3.13 -76.07%

Poland 317 108 1.59 2.95 -46.23%Pakistan 7990 101 39.96 79.05 -49.45%

Philippines 8250 174 41.26 47.52 -13.17%Russia 6842 235 34.22 29.16 17.36%

Saudi Arabia 619 165 3.10 3.75 -17.47%Singapore 358 249 1.79 1.43 24.78%

South Africa 1295 137 6.47 9.48 -31.68%South Korea 247000 196 1235.31 1259.55 -1.92%

Sweden 1700 219 8.50 7.78 9.29%Switzerland 145 137 0.73 1.06 -31.70%

Taiwan 6890 210 34.46 32.82 5.00%Thailand 6514 188 32.58 34.73 -6.20%Turkey 189 123 0.95 1.54 -38.54%

Vietnam 3100000 177 15503.88 17479.00 -11.30%UAE 325 88 1.63 3.67 -55.75%

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METHODOLOGY




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Ming Xia

APPENDIX 1: EVALUATION OF WINDOWS VISTA INDEX VS ACTUAL EXCHANGE RATE

Source: Bloomberg, Microsoft Co.

12 The retail price for Euro Area is taken as the average retail price of the area.

Vista Index Impliedppp of

the dollar

ActualExchange Rate

01/01/09

Under / overValuationLocal Currency in dollars

United States 200 - - -Australia 299 212 1.50 1.41 6.05%Britain 137 200 0.69 0.69 -0.19%Canada 260 213 1.30 1.22 6.55%China 499 73 2.50 6.82 -63.43%

Euro Area12 194 271 0.97 0.72 35.40%India 5000 103 25.01 48.77 -48.72%

Hong Kong 1700 219 8.50 7.75 9.70%Hungary 84990 450 425.06 188.90 125.02%

Indonesia 1060000 95 5301.33 11100.00 -52.24%Japan 27090 299 135.48 90.75 49.29%Kenya 7600 97 38.01 78.62 -51.65%

Malaysia 400 116 2.00 3.45 -42.06%New Zealand 337 198 1.68 1.70 -0.96%

Norway 1955 282 9.78 6.92 41.27%Peru 150 48 0.75 3.13 -76.07%

Poland 317 108 1.59 2.95 -46.23%Pakistan 7990 101 39.96 79.05 -49.45%

Philippines 8250 174 41.26 47.52 -13.17%Russia 6842 235 34.22 29.16 17.36%

Saudi Arabia 619 165 3.10 3.75 -17.47%Singapore 358 249 1.79 1.43 24.78%

South Africa 1295 137 6.47 9.48 -31.68%South Korea 247000 196 1235.31 1259.55 -1.92%

Sweden 1700 219 8.50 7.78 9.29%Switzerland 145 137 0.73 1.06 -31.70%

Taiwan 6890 210 34.46 32.82 5.00%Thailand 6514 188 32.58 34.73 -6.20%Turkey 189 123 0.95 1.54 -38.54%

Vietnam 3100000 177 15503.88 17479.00 -11.30%UAE 325 88 1.63 3.67 -55.75%

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METHODOLOGY




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REFERENCE

Anon. 2000. Big MacCurrencies. The Economist (US), 9 April. Pg 91

Ong, L.L. 1998. Fast food for thought: Burgernomics and the ASEAN currency crisis.Journal of the Securities Institute of Australia, Autumn (1) : pg 15-16

Laurenceson, James & Kam, Ki Tang 2006. China’s Equilibrium Exchange Rate and TradeBalance: a Tale of Apples and Pirates. East Asia Economic Research Group. Discussionpaper No.8. Available from: IDEAS. [20 February 2009]

Laurenceson, J. and Qin, F. (2006) The exchange rate debate, in Economic growth,transition and globalization in China (Ed.) Y. Wu, Edward Elgar, Cheltenham, pp 199-213

Ong Lilian (1997) Burgernomics: The economics of the Big Mac standard, Journal ofInternational Money and Finance, 16, 865-78.

Parsley, David.C. & Shang, Jin Wei (2003) A Prism into the PPP Puzzles: The Micro-foudnations of Big Mac Real Exchage Rates, NBER Working Papers 10074

Yang, Jiawen (2004) Nontradables and the valuation of RMB – an evaluation of the BigMac index, China Economic Review 15, 353-5

Cox, Joe (2007), Purchasing power parity and cultural convergence: evidence form theglobal video games marlet, Journal of Cultural Economcis, Volume 32, Number 3

Xu, Zhenhui (2002), Purchasing power parity, price indices and exchange rate forecasts,Journal of International Money and Finance, Vol.22: 105-130.

Clement W. Kenneth & Lan Yihui, A New Approach To Forecasting Exchange Rates,Economics Discussion Working Paper, The University of Western Australia, Departmentof Economics

Hines 2004. Cnet news.http://management.silicon.com/itdirector/0,39024673,39124118,00.htm. \

Story, alan 2004. Intellectual property and computer software.

Story, Alan (2004), Intellectual Property and Computer Software – A Battle of CompetingUse and Access Visions for Countries of The South. UNCTAD-ICTSD Project on IPRs andSustainable Development. Internationl Centre for Trade and Sustainable Development

International Trade Administration, “Computer Software Industry”. [Online] U.S.Department of Commerce, (2008), Available at:http://www.trade.gov/investamerica/computer_software.asp[Accessed 9 March 2009].

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Desmond, J.P., “Innovation Alive and Well”. [Online] Software Magazine (2009),Available at:http://www.softwaremag.com/L.cfm?Doc=1175-10/2008 [Accessed 9 March 2009]

Engel, C. & Rogers. J.H. (1996), How wide is the border? The American EconomicReview, 86(5), 1112-1125

Engel, C. & Rogers, J.H. (2001) Deviations from purchasing power parity: Causes andwelfare costs. Journal of International Economics, 55, 1242-1272. doi:10.1016/S0022-1996(01)00094-0

Hearn, G. and T. Mandeville (2005). How to be productive in the knowledge economy:the case of ICTs. Handbook on the knowledge economy. R. David, H. Grey and N.Abraham. Cheltenham, Edward Elgar: 255-267

Pakko, M. R. and Pollard, P.S.(1996) For here or to go? Purchasing power parity and theBig Mac. Federal Reserve Bank of St. Louis Review 78, 3-21.

Desmond, J.P., “Innovation Alive and Well”. [Online] Software Magazine (2009).Available at:http://www.softwaremag.com/L.cfm?Doc=1175-10/2008 [Accessed 9 March 2009]

Christensson, P., 2007. Commercial Software Definition. [Online] Available at:http://www.techterms.com/definition/commercialsoftware [Accessed 3 March 2009].

Fuller, T., “How Microsoft Warded Off Rivals”. [Online]New York: The New York Times,(2003), Available at:http://www.nytimes.com/2003/05/15/technology/15SOFT.html?ei=5007&en=a675991e5c85fa9b&ex=1368331200&partner=USERLAND&pagewanted=all&position=[Accessed 20 February 2009].

Anon. , ‘Purchasing Power Parity and the Balassa-Samuelson Effect’. [Online] NationalGraduate Institute for Policy Studies , (2009). Available at:http://www.grips.ac.jp/teacher/oono/hp/lecture_F/lec05.htm [Accessed 10 March2009]

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REFERENCE

Anon. 2000. Big MacCurrencies. The Economist (US), 9 April. Pg 91

Ong, L.L. 1998. Fast food for thought: Burgernomics and the ASEAN currency crisis.Journal of the Securities Institute of Australia, Autumn (1) : pg 15-16

Laurenceson, James & Kam, Ki Tang 2006. China’s Equilibrium Exchange Rate and TradeBalance: a Tale of Apples and Pirates. East Asia Economic Research Group. Discussionpaper No.8. Available from: IDEAS. [20 February 2009]

Laurenceson, J. and Qin, F. (2006) The exchange rate debate, in Economic growth,transition and globalization in China (Ed.) Y. Wu, Edward Elgar, Cheltenham, pp 199-213

Ong Lilian (1997) Burgernomics: The economics of the Big Mac standard, Journal ofInternational Money and Finance, 16, 865-78.

Parsley, David.C. & Shang, Jin Wei (2003) A Prism into the PPP Puzzles: The Micro-foudnations of Big Mac Real Exchage Rates, NBER Working Papers 10074

Yang, Jiawen (2004) Nontradables and the valuation of RMB – an evaluation of the BigMac index, China Economic Review 15, 353-5

Cox, Joe (2007), Purchasing power parity and cultural convergence: evidence form theglobal video games marlet, Journal of Cultural Economcis, Volume 32, Number 3

Xu, Zhenhui (2002), Purchasing power parity, price indices and exchange rate forecasts,Journal of International Money and Finance, Vol.22: 105-130.

Clement W. Kenneth & Lan Yihui, A New Approach To Forecasting Exchange Rates,Economics Discussion Working Paper, The University of Western Australia, Departmentof Economics

Hines 2004. Cnet news.http://management.silicon.com/itdirector/0,39024673,39124118,00.htm. \

Story, alan 2004. Intellectual property and computer software.

Story, Alan (2004), Intellectual Property and Computer Software – A Battle of CompetingUse and Access Visions for Countries of The South. UNCTAD-ICTSD Project on IPRs andSustainable Development. Internationl Centre for Trade and Sustainable Development

International Trade Administration, “Computer Software Industry”. [Online] U.S.Department of Commerce, (2008), Available at:http://www.trade.gov/investamerica/computer_software.asp[Accessed 9 March 2009].

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Desmond, J.P., “Innovation Alive and Well”. [Online] Software Magazine (2009),Available at:http://www.softwaremag.com/L.cfm?Doc=1175-10/2008 [Accessed 9 March 2009]

Engel, C. & Rogers. J.H. (1996), How wide is the border? The American EconomicReview, 86(5), 1112-1125

Engel, C. & Rogers, J.H. (2001) Deviations from purchasing power parity: Causes andwelfare costs. Journal of International Economics, 55, 1242-1272. doi:10.1016/S0022-1996(01)00094-0

Hearn, G. and T. Mandeville (2005). How to be productive in the knowledge economy:the case of ICTs. Handbook on the knowledge economy. R. David, H. Grey and N.Abraham. Cheltenham, Edward Elgar: 255-267

Pakko, M. R. and Pollard, P.S.(1996) For here or to go? Purchasing power parity and theBig Mac. Federal Reserve Bank of St. Louis Review 78, 3-21.

Desmond, J.P., “Innovation Alive and Well”. [Online] Software Magazine (2009).Available at:http://www.softwaremag.com/L.cfm?Doc=1175-10/2008 [Accessed 9 March 2009]

Christensson, P., 2007. Commercial Software Definition. [Online] Available at:http://www.techterms.com/definition/commercialsoftware [Accessed 3 March 2009].

Fuller, T., “How Microsoft Warded Off Rivals”. [Online]New York: The New York Times,(2003), Available at:http://www.nytimes.com/2003/05/15/technology/15SOFT.html?ei=5007&en=a675991e5c85fa9b&ex=1368331200&partner=USERLAND&pagewanted=all&position=[Accessed 20 February 2009].

Anon. , ‘Purchasing Power Parity and the Balassa-Samuelson Effect’. [Online] NationalGraduate Institute for Policy Studies , (2009). Available at:http://www.grips.ac.jp/teacher/oono/hp/lecture_F/lec05.htm [Accessed 10 March2009]

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