The world economy or global economy is the economy of all humans of the world, referring to the global economic system that includes all economic activity within nations and between nations, including production, consumption, economic management, exchange of financial values and trade of goods and services. In some contexts, the two terms are distinct "international" or "global economy" being measured separately and distinguished from national economies while the "world economy" is simply an aggregate of the separate countries' measurements. Beyond the minimum standard concerning value in production, use and exchange, the definitions, representations, models and valuations of the world economy vary widely. It is inseparable from the geography and ecology of planet Earth.
It is common to limit questions of the world economy exclusively to human economic activity and the world economy is typically judged in monetary terms, even in cases in which there is no efficient market to help valuate certain goods or services, or in cases in which a lack of independent research, genuine data or government cooperation makes establishing figures difficult. Typical examples are illegal drugs and other black market goods, which by any standard are a part of the world economy, but for which there is by definition no legal market of any kind.
However, even in cases in which there is a clear and efficient market to establish a monetary value, economists do not typically use the current or official exchange rate to translate the monetary units of this market into a single unit for the world economy since exchange rates typically do not closely reflect worldwide value, for example in cases where the volume or price of transactions is closely regulated by the government.
Rather, market valuations in a local currency are typically translated to a single monetary unit using the idea of purchasing power. This is the method used below, which is used for estimating worldwide economic activity in terms of real United States dollars or euros. However, the world economy can be evaluated and expressed in many more ways. It is unclear, for example, how many of the world's 7.8 billion people (as of March 2020[update]) have most of their economic activity reflected in these valuations.
According to Maddison, until the middle of 19th century, global output was dominated by China and India. Waves of Industrial Revolution in Western Europe and Northern America shifted the shares to the Western Hemisphere. As of 2020, the following 15 countries or collectives have reached an economy of at least US$2 trillion by GDP in nominal or PPP terms: Brazil, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Turkey, the United Kingdom, the United States and the European Union.
World economy by country groupsEdit
|country groups with individual countries designated by the IMF. Members of the G-20 major economies are in bold.|
|List of country groups by GDP (nominal) at peak level as of 2020 in millions US$||List of country groups by GDP (PPP) at peak level as of 2020 in millions US$|
|The 25 largest economies by GDP (nominal), twenty largest economies by GDP (PPP) as of 2020. Members of the G-20 major economies are in bold.|
|List of the 25 largest economies
by GDP (nominal) at their peak level as of 2020 in millions US$
|List of the 25 largest economies
by GDP (PPP) at their peak level as of 2020 in millions US$
|List of the 25 economies by highest
GDP (nominal) per capita at their peak level as of 2020 in US$
|List of the 25 economies by highest|
GDP (PPP) per capita at their peak level as of 2020 in US$
Twenty largest economies in the world by nominal GDPEdit
Twenty largest economies in the world by GDP (PPP)Edit
This section needs expansion. You can help by adding to it. (September 2020)
- GDP (GWP) (gross world product): (purchasing power parity exchange rates) – $59.38 trillion (2005 est.), $51.48 trillion (2004), $23 trillion (2002)
- GDP (GWP) (gross world product): (market exchange rates) – $60.69 trillion (2008)
- GDP (real growth rate):
- GDP – per capita: purchasing power parity – $9,300, €7,500 (2005 est.), $8,200, €6,800 (92) (2003), $7,900, €5,000 (2002)
- World median income: purchasing power parity $1,041, €950 (1993)
- GDP – composition by sector: agriculture: 4%; industry: 32%; services: 64% (2004 est.)
- Inflation rate (consumer prices); national inflation rates vary widely in individual cases, from declining prices in Japan to hyperinflation in several Third World countries (2003):
- Derivatives OTC outstanding notional amount: $601 trillion (Dec 2010) ()
- Derivatives exchange traded outstanding notional amount: $82 trillion (June 2011) ()
- Global debt issuance: $5.187 trillion, €3 trillion (2004), $4.938 trillion, €3.98 trillion (2003), $3.938 trillion (2002) (Thomson Financial League Tables)
- Global equity issuance: $505 billion, €450 billion (2004), $388 billion. €320 billion (2003), $319 billion, €250 trillion (2002) (Thomson Financial League Tables)
- Unemployment rate: 8.7% (2009 est.). 30% (2007 est.) combined unemployment and underemployment in many non-industrialized countries; developed countries typically 4%–12% unemployment.
- Industrial production growth rate: 3% (2002 est.)
- Yearly electricity – production: 21,080,878 GWh (2011 est.), 15,850,000 GWh (2003 est.), 14,850,000 GWh (2001 est.)
- Yearly electricity – consumption: 14,280,000 GWh (2003 est.), 13,930,000 GWh (2001 est.)
- Oil – production: 79,650,000 bbl/d (12,663,000 m3/d) (2003 est.), 75,460,000 barrels per day (11,997,000 m3/d) (2001)
- Oil – consumption: 80,100,000 bbl/d (12,730,000 m3/d) (2003 est.), 76,210,000 barrels per day (12,116,000 m3/d) (2001)
- Oil – proved reserves: 1.025 trillion barrel (163 km3) (2001 est.)
- Natural gas – production: 3,366 km3 (2012 est.), 2,569 km3 (2001 est.)
- Natural gas – consumption: 2,556 km3 (2001 est.)
- Natural gas – proved reserves: 161,200 km3 (1 January 2002)
- Yearly exports: $12.4 trillion, €11.05 trillion (2009 est.)
- Exports – commodities: the whole range of industrial and agricultural goods and services
- Exports – partners: US 12.7%, Germany 7.1%, China 6.2%, France 4.4%, Japan 4.2%, UK 4.1% (2008)
- Yearly imports: $12.29 trillion, €10.95 trillion (2009 est.)
- Imports – commodities: the whole range of industrial and agricultural goods and services
- Imports – partners: China 10.3%, Germany 8.6%, US 8.1%, Japan 5% (2008)
- Debt – external: $56.9 trillion, €40 trillion (31 December 2009 est.)
- Yearly economic aid – recipient: net Official Development Assistance (ODA) of $135.2 billion (2014)
Telephones – main lines in use: 843,923,500 (2007)
- Telephones – mobile cellular: 3,300,000,000 (Nov. 2007)
- Internet Service Providers (ISPs): 10,350 (2000 est.)
- Internet users: 3,079,339,857 (December 31, 2014 ), 360,985,492 (December 31, 2000)
Transportation infrastructure worldwide includes:
- Total: 41,821 (2013)
- Roadways (in kilometres)
- Total: 32,345,165 km
- Paved: 19,403,061 km
- Unpaved: 12,942,104 km (2002)
- World military expenditure in 2018: estimated to $1.822 trillion 
- Military expenditures – percent of GDP: roughly 2% of gross world product (1999).
Science, research and developmentEdit
The Royal Society in a 2011 report stated that in terms of number of papers the share of English-language scientific research papers the United States was first followed by China, the UK, Germany, Japan, France, and Canada. In 2015, research and development constituted an average 2.2% of the global GDP according to the UNESCO Institute for Statistics. Metrics and rankings of innovation include the Bloomberg Innovation Index, the Global Innovation Index and the share of Nobel laureates per capita.
Resources and environmentEdit
- Forests (carbon sinks, wood, ecosystem services, ...)
- Other land degradation and land- and organisms-related ecosystem disturbances
- Soils (carbon sink, ecosystem services, food production, ...)
- Soil erosion by water in 2012: almost 36 billion tons (based on a high resolution global potential soil erosion model developed in 2017)
- Estimated annual loss of agricultural productivity due to soil erosion: 8 billion US dollars (based on the soil erosion data)
- Soil erosion by water in 2015: approximately 43 billion tons (according to a 2020 study)
- Environmental impact of pesticides
- Pesticide use in tonnes of active ingredient in Australia in 2016: ca. 62,500 tonnes
- Soils (carbon sink, ecosystem services, food production, ...)
- Oceans (ecosystem services, food production, ...): Blue economy
- Waste and pollution (effects of economic mechanisms, effects on ecosystem services)
- As of 2018, about 380 million tonnes of plastic is produced worldwide each year. From the 1950s up to 2018, an estimated 6.3 billion tonnes of plastic has been produced worldwide, of which an estimated 9% has been recycled and another 12% has been incinerated with the rest reportedly being "dumped in landfills or the natural environment".
- Air pollution
- Microplastic pollution
- Estimated accumulated number of microplastic particles in the North Atlantic Ocean in 2014: 15 to 51 trillion particles, weighing between 93,000 and 236,000 metric tons
- Estimated accumulated number of microplastic particles in the North Atlantic Ocean in 2020: 3700 microplastics per cubic meter
From the scientific perspective, economic activities are embedded in a web of dynamic, interrelated, and interdependent activities that constitute the natural system of Earth. Novel application of cybernetics in decision-making (such as in decision-making related to process- and product-design and related laws) and direction of human activity (such as economic activity) may make it easier to control modern ecological problems.
|Estimations of world population and GDP from a 2020 research paper|
|GDP per capita
(1990 $ in PPP)
|GDP in billion |
(1990 $ in PPP)
One example for a comparable metric other than GDP are the OECD Better Life Index rankings for different aggregative domains.
Explained by: Housing
Explained by: Income
Explained by: Jobs
Explained by: Community
Explained by: Education
Explained by: Environment
Explained by: Civic engagement
Explained by: Health
Explained by: Life Satisfaction
Explained by: Safety
Explained by: Work-Life Balance
|OECD Better Life Index rankings for 2016|
|Country||Housing||Income||Jobs||Community||Education||Environment||Civic engagement||Health||Life Satisfaction||Safety||Work-Life Balance|
The index includes 11 comparable "dimensions" of well-being:
- Housing: housing conditions and spendings (e.g. real estate pricing)
- Income: household income (after taxes and transfers) and net financial wealth
- Jobs: earnings, job security and unemployment
- Community: quality of social support network
- Education: education and what one gets out of it
- Environment: quality of environment (e.g. environmental health)
- Governance: involvement in democracy
- Life Satisfaction: level of happiness
- Safety: murder and assault rates
- Work-life balance
To promote exports, many government agencies publish on the web economic studies by sector and country. Among these agencies include the USCS (US DoC) and FAS (USDA) in the United States, the EDC and AAFC in Canada, Ubifrance in France, the UKTI in the United Kingdom, the HKTDC and JETRO in Asia, Austrade and the NZTE in Oceania. Through Partnership Agreements, the Federation of International Trade Associations publishes studies from several of these agencies (USCS, FAS, AAFC, UKTI, and HKTDC) as well as other non-governmental organizations on its website globaltrade.net.
- Anarchy (international relations)
- Common Wealth: Economics for a Crowded Planet (book)
- Economic bubble
- Economic collapse
- Emerging and growth-leading economies
- Fourth Industrial Revolution
- Global financial system
- Global workforce
- Trade route
- Petrodollar recycling
- World Trade Report
- World history
- World-systems theory
- Economy of Africa
- Economy of Asia
- Economy of Europe
- Economy of North America
- Economy of Oceania
- Economy of South America
- Great Recession
- World oil market chronology from 2003
- Financial crisis of 2007–2008
- 2007–2008 world food price crisis
- List of countries by GDP sector composition
- List of world's largest economies (nominal) – based on current currency market exchange rates
- List of world's largest economies (PPP) – based on purchasing power parity
- Historical list of world's largest economies (PPP) – for the years between 1 and 1998
- List of world production
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