World GGP Grew by 4.3% in 2005

The World GGP (Gross Global Product) grew by a strong 4.3% in 2005.  While this rate would merely be considered robust today, it is a rate unheard of before the mid-20th century.  In fact, prior to the 16th century, 4.3% growth was what the world economy might have seen in an entire century, rather than just a single year. 

Refer to how Economic Growth is Exponential and Accelerating for a detailed study.

However, this growth, which added $1.8 trillion to the now $44 trillion world economy, was not evenly distributed at all.  In fact, more than one third of the $1.8 trillion was generated in just the US and China.  A breakdown of the wealth creation, by country (in direct currency conversion, not purchase power parity (PPP)) :

United States : 25.0%

EU (a collection of 24 separate countries) : 12.6%

China : 9.5%

Japan : 5.8%

India : 3.0%

Russia : 2.5%

Rest of World : 41.6%

A large economy with a slow growth rate, like that of the EU, produces a similar portion of the pie as a small economy with a high growth rate, like that of China.  This also means that India and China will soon be contributing a much larger percentage of the pie, as their currencies appreciate through increased exports.

In viewing historical World GDP Growth from The Economist, we can not only see that there has not been a year without growth since 1980, but that the difference between nominal and PPP growth rates have been diverging due to India and China. Continued growth will result in currency appreciation for both (China is already forcibly keeping its currency undervalued), and will bring the light-blue nominal line up to the level of the darker PPP line.  The awakening of India and China to supercharge the global economy is effectively the single biggest event of the last 15 years. 

This could push the world GGP growth trendline over 5% by 2020, and would be consistent with the expected continued acceleration of the world's economy in the 21st century. 

Comments

[Scott]

I was brought here by your link "The European Union, formed to be an economic couterweight to the US, still produces just half of the new wealth that the US produces, and has a growth rate much lower than the world average"

The USA also has a growth rate below the world average. Your statement is also factually incorrect according to the IMF.

Here are the IMF's figures for 2006 and IMF predictions for 2007 and 2008. All nominal figures.

The EU in 2007 is projected by the IMF to add 1964 Billion US dollars of value to the world economy, China 603.88 and the USA, in third place, with 599.2.

In 2008 the EU is expected to add 1033.164 Billion US dollars of value to the world economy, with the USA recovering to 2nd place at 511.48 billion (less than half the EU's wealth addition to the world economy), with China just being pipped into third place with 464.78n.

____________________________________USA____v____EU

World share of GDP____________________ %___________%

2006_______________________________27.41________30.35

2007_______________________________26.78________32.18

2008_______________________________26.16________32.20

It is interesting data from the IMF. While the EU in 2006 had only an economy which was only 9% bigger than the USA's, by 2008, the IMF predicts that the EU's economy will be 19% bigger.

Also of interest is the projection that while the EU's share of the world's economy will actually grow, the USA's will decline. The EU's economic power in the world will grow while the USA's will continue its long term decline in the share of the world's GDP.

This trend has been evident since the 1950s when the USA's share of world GDP was about 50%. In 2006 it had declined to 27.41% (according to the IMF) and they expect its long term decline to continue with a further drop to 26.16% in 2008.

[GK]

Scott,

I merely have to repeat the same points as the last time I wholly crushed you in a debate on the same topic.

1) The EU's share of the world economy is rapidly shrinking relative to the US, as per Businessweek.

2) The US does more scientific research than the EU, in both dollars and the number of scientists. That 1 country is more than a collection of 27 is a remarkable testament to US power.

3) A study by the EU has found that the EU economy is 22 years behind the US.

Again, this is an EU study.

4) In terms of status as a reserve currency, the dollar dwarfs the Euro by a 2.5-to-1 margin. This is an enormous margin.

5) Plus, you can't seem to tell me who the elected President/Prime Minister of the EU is. Why can't you produce a name?

6) The EU in 2007 is projected by the IMF to add 1964 Billion US dollars of value to the world economy,

So...off of a $15,000B economy, are you saying the EU grew at 13%? If this is the level of economics knowledge in the EU, then it is doing even worse than thought.

You need to educate yourself on the concepts of a) inflation, and b) currency fluctuations. Until then, you are way out of your league discussing a topic you understand so poorly.

The Economist (a British magazine) shows the Euro Area + UK growing at just 2.0% in 2009, vs. 2.6% for the US.

A British Magazine, no less. You might learn something if you read it.

[Scott]

“I merely have to repeat the same points as the last time I wholly crushed you in a debate on the same topic.”

Well I remember coming to the conclusion that a swinging gate would have been seen by you as a sign of a sweeping victory. As I previously pointed out, objectively, reading comprehension isn't one of your strong points. Hubris obviously is though.

Facts, facts, facts.

You never let them get in the way of your own deeply felt belief of the USA's superiority.

"The EU's share of the world economy is rapidly shrinking relative to the US, as per Businessweek.
http://www.businessweek.com/magazine/content/05_34/b3948408.htm"

Your (American) businessweek article was based on a prediction made by a private Indian FDI consulting firm not an EU report as you had previously claimed elsewhere on this site.

You can find the original Keys Tone pdf here.

http://www.keystone-india.com/pdfs/The%20India%20Century.pdf

Interestingly Key Tones sales pitch for India (which is essentially what the report is) had failed to predict the catastrophic decline in the dollar (only 2 years after the report) but had confidently predicted the future 45 years ahead. Mmmm.

It also failed to predict the above IMF findings of fact that in fact it is the USA which is declining in share of world GDP while the EU's share of GDP is growing.

That bears repeating because it is a fact not a prediction.

IMF figures prove that in fact it is the USA which is declining in its share of world GDP while the EU’s share of world GDP is growing.

That’s got to hurt. Well it would if you actually paid any attention to facts that prove you wrong. Shall we call it an inconvenient truth?

Anyway, if anyone is interested they can read our original debate here

http://futurist.typepad.com/my_weblog/2006/05/why_the_us_will/comments/page/2/#comments

http://futurist.typepad.com/my_weblog/2006/05/why_the_us_will/comments/page/3/#comments

You just kind of just petered out if I remember correctly. I think the final indignity for you was when even the CIA fact book didn't agree with you.

[Scott]

Actually I took 3 months to be......

edited by siteowner until Scott answers a simple question (7th request)

[GK]

Scott, who is the elected supreme leader of the EU? Nations have leaders, you know, and these leaders command the militaries of their countries. This is the seventh time I am asking this question. There will be no further discussion until you stop avoiding this simplest of questions in shameful cowardice and stunning intellectual incompetence.

[Scott]

Facts my good man. Facts.

edited by siteowner because Scott won't answer simple question, now the 8th request.

[Scott]

You haven’t asked that question 7 times. It was only asked 3 times.

GK asks : Even if it were 3 times (it is not), is that a reason to dodge the simple question? You get more pathetic by the minute.

[Scott]

But i did answer it.

The unelected head of the EU is Jose Manuel Barroso.

Deary me. I wish you would actually read my posts if you expect me to do the same to yours.

[GK]

The unelected head of the EU is Jose Manuel Barroso.

Aha!!

So do Gordon Brown, Angela Merkel, Nicholas Sarkozy, Silvio Berlusconi, etc. all follow the leadership of Jose Manuel Barroso? Does Mr. Barroso have power over tax revenue paid by the citizens of Germany, Poland, Greece, etc.? Does Mr. Barroso have command over a huge EU military, or any military beyond that of Portugal? Does Mr. Barroso have the authority to fire France or Britains nuclear weapons?

No, he does not.

Is Mr. Barroso as powerful as, say, George W. Bush, or even Stephen Harper?

No, he is not.

The EU has no supreme leader, as the EU is not a country.

From your answer. it appears that the EU is not a country. It is a loose association of 27 countries. A collection that lags America in R&D, GDP per capita, etc., as shown by my sources above.

Now, you will have to admit that the EU is not a country. Until you admit that, there will be no further comments.

[Scott]

Look, no one likes to be.......

edited by siteowner until Scott admits that the EU is not a sovereign nation.

[Scott]

However, because of the EU's special status, this description is placed after the regular country entries.”

edited by siteowner until Scott admits that the EU is not a sovereign nation.

GK : The above sentence tells me that the EU is distinctly NOT a country, as it is placed after regular country entries, no? Let me make it simpler - who is more powerful, Jose Barroso, or Stephen Harper?

[Scott]

You have clearly......

edited by siteowner until Scott admits that the EU is not a sovereign nation.

[Scott]

It was always going to end this way.....

edited by siteowner until Scott admits that the EU is not a sovereign nation.

[GK]

Scott,

You can't even admit that the EU is not a sovereign nation, despite being asked again and again. This is even after you admitted that the EU does not have a supreme leader.

Avoiding direct questions is pathetic. If this shambolic display is the best that jealous anti-Americans can do, then America's dominance is even more than I thought.

The EU is a loose collection of 27 countries, the sum of which still lag the US in R&D spending, foreign reserves, military strength, GDP per capita, etc. I have provided sources of this, which you have not disputed with countering sources, and thus have conceded to.

You also are too cowardly to answer whether Jose Barroso is more powerful than Stephen Harper or not. That really says it all.