35 Years of the World’s Economy Evolving as a Living Organism

March 26, 2016

A lot has happened to the global economy over the last 35 years. The forces of economic liberalization, globalization, and the rise of the multinational corporation have all left their mark. Many countries have benefited over this period, but some have suffered. Others have not really changed much in terms of their global economic position.

This 20 second video summarises 35 years of the World’s economy


In the diagram, the size of the countries and regions represent the relative size of their economies (in terms of nominal GDP). As the diagram cycles through the years from 1980 to 2015, you can see how economies have grown or contracted relative to others.


 
If you focus on a particular region or country, you will notice that in many cases there is a period of relative expansion followed by relative contraction, or vice versa. The US economy, for example, grew in relative terms until 1985, then it started to shrink until 1995, when it started growing again to a peak in 2002, and then fell back again until about 2009 — since then it has been relatively stable at around 22% of global GDP.

The biggest change over the last 35 years was a transfer of economic dominance from Europe to Asia. In 1980, Europe represented approximately 32% of global economic activity, while Asia accounted for about 20%. By 2012, their positions had been completely reversed.

Meanwhile, the relative GDP of North America decreased by just 2% over the 35-year period, while South America, Oceania, and Africa saw marginal increases. The Canadian and Mexican economies have declined slightly in relative terms (by 0.2% and 0.4%) between 1980 and 2014, while the US economy went from 25.7% of global GDP in 1980 to 22.5% in 2014.

The most drastic country-level changes happened within Asia. The biggest story is of course China, which grew from 2.8% of global GDP in 1980 to 13.4% in 2014. Conversely, Japan shrunk from 9.8% in 1980 to 6.0% in 2014. The other big contributors to Asia’s economic growth were India, South Korea, Russia, and Taiwan.

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