Understanding Gross Domestic Product
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 the table 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.)
Figure 1: Countries, ranked by GDP
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 #2 economy, China, which weighs in at $8.2 trillion.
Going down the list, if we add up the #2 (China) and #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 #7 (Brazil) through #15 (South Korea), we get a grand total of $15.3 trillion. This means the 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%) of all the goods and services produced in the entire world:
$15.685 / $71.707 = 21.9%
While China and the U.S. together, $23.912 trillion, account for more than one-third (33.4%):
$23.912 / $71.707 = 33.4%
This is a striking illustration of how much economic power these two countries have over the rest of the world, and why.
© All contents Copyright 2019, Harley Hahn