Now that we are comfortable with the idea of gross domestic products, let’s take a few moments and compare the GDPs for various countries. To start, I’d like to ask the question: Which countries have the largest GDPs? This is of course, is the same as asking the question: What are the largest economies in the world?
The answer can be seen in Figure 1 below. For comparison, I have also included an estimate of the GDP of the world as a whole ($71.707 trillion).
(Notes: USD means U.S. dollars; “Korea” refers to South Korea.)
The first thing we can see is that, by far, the United States has the largest GDP in the world — specifically, about $15.7 trillion U.S. dollars a year — which is another way of saying that the U.S. has the largest economy of any country in the world. In fact, the U.S. economy is nearly twice the size of the number 2 economy, China, which weighs in at $8.2 trillion.
Going down the list, if we add up the No. 2 (China) and No. 3 (Japan) values, we get only $14.2 trillion. Thus, the United States GDP is bigger than that of China and Japan put together.
Working in the lower part of the list, if add up the GDPs from No. 7 (Brazil) through No. 15 (South Korea), we get a grand total of $15.3 trillion. This means the United States economy is bigger than the economies of Brazil, Russia, Italy, India, Canada, Australia, Spain, Mexico, and South Korea put together.
What is even more startling is to realize that the U.S. economy accounts for more than one fifth (21.9 percent) of all the goods and services produced in the entire world:
$15.685 / $71.707 = 21.9 percent
While China and the U.S. together, $23.912 trillion, account for more than one-third (33.4 percent):
$23.912 / $71.707 = 33.4 percent
This is a striking illustration of how much economic power these two countries have over the rest of the world, and why.
This is one of a multi-part series on Understanding Gross Domestic Product appearing biweekly at independent.com. Next time: “Thinking in Terms of Economic Regions, Not Countries.”
Harley Hahn has a degree in mathematics and computer science from the University of Waterloo in Canada, a graduate degree in Computer Science from UC San Diego, and has studied medicine at the University of Toronto Medical School. Hahn is a writer, philosopher, humorist, and computer expert. In all, he has written 30 books that have sold more than 2 million copies, and his work is archived by the Special Collections Department of the UC Santa Barbara library. Hahn has written widely about money and economics, and is also an accomplished abstract artist and a skilled musician. See more at www.harley.com.