Thomas Friedman, in his book, Lexus and the olive tree has made an interesting theory based on capitalism, and has appropriately named it as the Golden arches theory. As per his theory, no two economies sustaining Mc Donalds franchisees will not go for war against each other. As a caveat, he excludes any civil wars in his definition. The basis of this proposition lies in the world’s constant move towards globalization. Post the cold war era, countries that have embraced globalization with open arms are the ones that are prospering, the others are moving towards embracing it. Sooner or later, all countries would become McDonald economies.
Probably that means that in order to avoid combat, open McDonald franchisees.
Did Ray Croc develop the golden arches with this in mind? Did he ever imagine that his business would someday be used as economic indicators? The Big Mac PPP exchange rate between two countries is obtained by dividing the cost of a Big Mac in one country (in its currency) by the cost of a Big Mac in another country (in its currency). This value is then compared with the actual exchange rate; if it is lower, then the first currency is under-valued (according to PPP theory) compared with the second, and conversely, if it is higher, then the first currency is over-valued.
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