What is the World Economy? Economy Defined
It’s always good to understand what you need to understand. Suppose you live in a city Alabama and own a clothing business. You need different raw materials to make clothes—some businessmen in the town supply these essential raw materials. From them, you take raw materials and make clothes, and this is the economy of the city, Alabama. You made the cloth and sold it to a prominent merchant in another city. Many more merchants like you are making clothes in a town and selling clothes in another town because there is a shortage of clothes in that city. Thus the flow of economy from one town to another is the internal economy of a country. Maintaining the same flow rules, the economic bond between one country to another is the world economy or the global economy.
The economy is the calculation of the profit and loss of a transaction that occurs through the services of a particular region. The city of Alabama, for example, has its unique economy. This economy considers all the products made in that city. The economy of that city can be good and bad considering all aspects. The economy of the city of Alabama is okay if they make a profit by doing business. And if their condition is such that they can’t get customers to sell the product, they can’t increase the quality of the product, then the economy of that city is terrible.
Which countries are included in the world economy?
Any country that has exported or imported products to any country other than its own is included in the world economy. All countries are part of the world economy except for a few. The reason for the exclusion of those few countries may be that they are still far behind the civilizations and have not been able to keep pace with the times. Or it may be that they do not need to deal with a foreign country, all the things to live a beautiful life exist in their own country.
According to the International Monetary Fund, the World Bank, and the United Nations, a list of countries in the world economy has been published on Wikipedia.
The status of a country in the world economy depends on two factors. The position of a country is fixed based on how much it exports and how much it imports. This is one way, another way is to determine the GDP. How much the quality of a country’s goods and services is improving and deteriorating over-time or the mathematical calculation of how much the price of goods and services is increasing and decreasing is expressed by GDP. The full form of GDP is the Gross Domestic Product.
There are two types of GDP, one of which is GDP (nominal), and the other is GDP (PPP). As I have instructed, The outcome of a country’s GDP (nominal) depends on the market value of the goods and services within a year. The results of a country’s GDP (PPP) depend on purchasing power parity and the exchange rate of the country’s official currency based on the international dollar.
What factors on which the world economy depends?
Currency Exchange: The world economy depends on the variability of international currencies and local currencies.
Trade Business: The change in the economy through trade in different businesses is the reason for the difference in the world economy.
Stock Exchange: The world economy changes based on buying and selling different products and exchanging stocks.
Import-Export: Buying and selling directly raw materials or any kind of product has a significant impact on changing the world economy.
Cost of living: We have to use a lot of materials to survive, the transformation of the economy through buying and selling these things ultimately affects the world economy.
Property Handover: Wealth goes from one person to another necessarily or unnecessarily, thus adversely affecting the economy through buying and selling assets.
Banking: At present, whatever we do is done through banks, so it can be said that banking plays a vital role in changing the world economy.
World Bank Reserves: For the good of each country, a lot of money is in reserve at the World Bank, sooner or later these funds are used for the development of the country or the people. This money affects the world economy, sooner or later.
Healthcare loan: Many people borrow or take loans for human services, and vast sums of money are spent on social services every year. Where payment is paid globally, it will have an impact on the world economy.
Education loan: In the same way that borrowing for the activities of the World Health Organization affects the economy, financing for education also has an adverse effect on the world economy.
Green Invention: Innovation, to make human life more comfortable, something new is continually being invented, to research and launch these enormous amounts of money has to be transacted globally which has an impact on the world economy.
Natural resources: We know that not all countries have the same amount of natural resources; these valuable natural resources need to be exchanged for survival. So clearly, its impact exists in the world economy.
Unveiling Initiate Companies: The most prominent industrial companies have the most significant impact on the world economy. In addition to these, the new companies that are constantly growing from small to large or the companies that are newly created also have no less impact on the world economy.
Price Prediction: Trading depends on whether prices rise or fall, and these predictions can turn the tide of the world economy.
War & Epidemic: Wars and epidemics can never do the economy any kind, but not without their role in harming the economy. Along with the loss of the economy, wars and epidemics also cause damage to the country and the people.
What are the most valuable assets in the economy?
- All types of clothes
Farm & Fisheries:
- All types of Animals
- Real estate
If you’re not satisfied yet, you can turn to the ‘List of Most Expensive and Valuable Assets‘ content published on Wikipedia. If you have no idea about ‘market value,’ you can read another article on Wikipedia.
What will be the problem if the world economy collapses?
To put it simply, it would be awful and horrible. The current world is in the grip of money if, at this time, the economy collapses, then people are not safe. A lot can be said, but it is being said in a small way to make it easier to understand. Here are a few possibilities to get an idea of what could happen to the world if the world economy collapses.
- In case of war or epidemic, one country cannot help another.
- The economy will be turned upside down, which will increase the price of goods, and people will not be able to procure food or essential items.
- If the raw materials required for drug products do not reach the right amount, common ailments will be challenging to treat.
- The required raw material will not reach the various industries, and as a result, the textile industry will collapse.
- Communications will have more adverse effects, including travel if the economy collapses.
- The prices of all commodities will increase, there will be chaos among the people, theft, robbery, and looting will increase.
- The import-export relationship between countries will be eroded due to the collapse of the world economy.
- Wealth prices will plummet, leading to further collapse of the economy and people’s lives.
- The chaos will lead to a breach of national security and an increase in various criminal activities, including terrorism.
Which way is the economy leading us?
As money goes from one person to another, I think the economy has already created a substantial invisible net. Money means power; power means eternal. So now it’s effortless to increase strength through funds and use that power to do good or bad. But another thing is that since money is something that anyone can achieve, there’s a chance that everyone will have money and everyone will have equal power. Although now we see that someone has more money, someone has less money.
However, the idea is that in this digital age, no one will be moneyless, gradually everyone will be able to use their skills. But there’re also some significant complications in this invisible money net. We’re so addicted to money that now people are behaving like animals for the sake of money, doing various anti-social activities for cash. Emerging countries are being deprived of necessities, including food, due to lack of funds. Young children aren’t able to study but have to work as laborers for the sake of money.
As the prices of commodities go up, on the one hand, the traders are benefiting, and on the other hand, the ordinary people are spending their days without food. But it must be acknowledged that everything has its ups and downs. There is no such thing only as good or bad. To survive or to maintain one’s position, one must first participate in the competition. Losing or winning should not be predetermined. After all we humans, we have the ability to understand good and evil, we can make decisions, we can do good to one another. The economy isn’t the only way of life; life is something you deserve.
What’s the role of technology in the economic field?
Technology has brought tide to the economy. At present, the importance of technology is continuously increasing in the economy. I wouldn’t be surprised if, after a while, technology becomes the biggest asset of the economy in the world economy.
Nowadays, there are very few places where technology has not touched. The other assets of the world economy are also dependent on technology. The strangest aspect of technology is that it’s flexible and able to show itself in new ways continually.
If you want to survive in the world economy, technology is an excellent medium. Technology is the easiest and most effective way to showcase your skills. You may know that all the prominent characters in the world so far have been successful using technology.
So you can be sure that there’s nothing to lie about, the truth is laid before you; all the doors of opportunity are open for you.
Technology has brought all the information in our hands; we’re getting innumerable information to improve the quality of life. Yet if we lag, we as human beings will identify as foolish creatures. Our previous generation had only a handful of opportunities in life, and now our whole life is an opportunity.
Also, there’s no room for backwardness here. With the advent of technology, the competition has increased so much that if you relax 1 minute, the other one will be 1 minute ahead of you. In the end, no matter how much technology changes the quality of life, the main goal of life is the same as before, life has survived using the previous formula. Skills, Knowledge, Innovation these were needed before technology and are still required.
Which countries are far ahead economically?
Since the economy is changing, every country’s economic position changes every year, so there is no reason to think that whoever is or was in the first place will always be in the first place. In this episode, I will mention the countries that were, are, and will be at the top of the world economy in the past, present, and future.
The World’s Top 25 Largest Economies in 2019 by GDP (nominal):
Per the International Monetary Fund (2019 estimates)
No specific rank of the European Union could be given because different regions within the Union have different places in the world economy.
Considering the economic condition of all the countries, if we add the economy, the amount of money in the whole world will be US$87,265,226 million, according to 2019 by GDP (nominal).
You can see Wikipedia for a list of all countries by GDP (nominal).
The World’s Top 25 Largest Economies in 2020 by GDP (PPP):
List by the IMF (International Monetary Fund)
The European Union and ASEAN are not specific countries, but a few countries have been organized to form an organization. Due to which they were not given any particular rank.
Considering the economic condition of all the countries, if we add the economy, the amount of money in the whole world will be US$138,352,382 million, according to 2020 by GDP (PPP).
You can see Wikipedia for a list of all countries by GDP (PPP).
It’s important to know if these charts will change in the future or how they will change. Looking at the current economic situation and current activities of different countries gives a perfect idea of what the future economy is going to be like.
Moreover, there are various other sources from which it can be said loudly what the economy will be like in the future, such as Focus-economics, China Economy Consensus Forecast, U.S-China Trade War, etc.
Without further ado, let’s take a look at who will be the most significant player in the world economy in 2023.
The 5 Largest Economies In The World And Their Future In 2023
You can visit Focus-Economics to learn about the progress of these five largest economies and to see infographics.
Which countries are lagging economically? And why?
The countries whose economic condition is corrupt or developing countries are lagging in terms of the world economy. You may want to know why the economy of some countries is so bad now where all the countries are surpassing each other in terms of economics. There could be many logical reasons behind this. Surely no one wants to be left behind, and that is why one country is lagging economically to compete with another.
- The touch of civilization is found later than in other countries. We know that not all states have received the bit of refinement at the same time, many have received it before, many have accepted it later, many have not yet received it.
- Because there is not enough workforce for development, the population of each country is indeed different, some states have more people, and some countries have fewer people.
- Another reason for economic backwardness is geographical location. There are some countries where access to any kind of facility is difficult or not possible at all. It is a far cry to keep the country’s economy in those places; it is challenging to survive properly.
- There are some areas where the weather is so unfavorable that it’s challenging to survive appropriately; it’s not possible to do anything profitable at all. Due to which the countries of those regions are lagging economically.
- The role of natural resources is crucial in keeping a country’s economy stable. Due to the small size of some countries, it is not possible to protect enough natural resources. It’s usual for those countries to lag economically.
It can’t be said what causes a country to lag economically, although no one wants to be left behind. All we can do is hope and try and work hard. A shortlist of financially backward countries has been released.
List of 15 Least Developed Nations Lagging Behind Economically
Smallest economies by nominal GDP in 2019:
Per the International Monetary Fund (2019 estimates)
Smallest economies by PPP GDP in 2020:
List by the IMF (2020 estimates)
How has the world economy changed in 2020 compared to 2018 and 2019?
#1 According to Wikipedia’s massive database, countries by nominal GDP is analyzed below. The analysis is between 2018 and 2019.
Analysis of Countries by nominal GDP – Depth View
In 2018, the World Bank created a database for the world economy, in which about 185 countries were named. It can be said that these 185 countries have the most critical role in sustaining the world economy.
In 2019, the International Monetary Fund (IMF) created a new database listing about 186 countries that have contributed the most to the world economy.
Let’s compare the data of two different periods; it isn’t tough to understand the rate at which the economies of various countries are growing and who is going to be the future king in economic terms.
The total GDP of the world economy was US$85,804,391 million in 2018, which is US$87,265,226 million in 2019, an increase of US$1,460,83 million in the 1-year interval.
In 2018, the United States topped the list in terms of economic conditions, followed by the People’s Republic of China and Japan. No wonder the rankings were the same in 2019, the position of the first three didn’t change. The fact that the rank has not changed does not mean that their money hasn’t increased or decreased. The United States grew its holdings from US$20,494,100 million to US$21,439,453 million in one year. The People’s Republic of China, which was in the second position, has increased its amount from US$13,608,152 million to US$14,140,163 million in one year. Similarly, Japan, which was in the third position in 2018, had an economic status of US$4,970,916 million, which increased to US$5,154,475 million in 2019.
There were some notable changes to the 2019 database that set it apart from 2018. The European Union is named before China in second place. However, the European Union has not been given any rank or position because more states within the union can express different economies one by one. Although not ranked, the economic status of the European Union in 2019 is mentioned, with a value of US $ 16,605,132 million.
Significantly, however, there were many countries in the database whose economic conditions had deteriorated or not changed, such as India, Italy, Brazil, Russia, France, United Kingdom, etc.
The economy of the first-ranked United States has grown by about 10% in one year. China, the second-largest economy, rose 5% over the same period. On the other hand, the amount of money in Japan, which is in the third position, has also increased by 10% in one year.
#2 According to Wikipedia’s enormous database, countries by PPP GDP is analyzed below. The analysis is between 2018 and 2020.
Analysis of Countries by PPP GDP – Depth View
In 2016, Wikipedia published a list of about 186 countries that have made significant contributions to the world economy under the auspices of the World Bank. Again in 2020, the index was released under the auspices of the International Monetary Fund (IMF), naming about 187 countries that have made significant contributions to the world economy.
The first common denominator between the two surveys was that the People’s Republic of China was in first place twice, the United States in second place, and India in third place.
If we calculate the total amount of all the countries in 2018, it is seen that it is Int$136,305,131 million, here Int$ means current international dollars. All the countries mentioned in the 2020 list add up to Int$138,352,372 million. In other words, the amount of money in the world economy increased by Int$2,046,251 million in two years, which is not too much.
As mentioned a while ago, China was in the first position in terms of rank in 2018 and 2020. In 2018, China’s annual economy was Int$25,397,678 million, which increased to Int$27,804,953 million in 2020. China has done a good deal of business in these two years.
On the other hand, the United States, which is in the second position, had an annual income of Int$20,544,343 million in 2018, which decreased to Int$20,289,987 million in 2020. So it can be said that the United States is slowly lagging in terms of PPP, namely purchasing power parity.
Then comes the serial India, which ranks third in the world economy in terms of rank. In 2018, India’s total wealth was Int$10,500,208 million, which increased to Int$11,321,280 million by 2020.
Further analysis of the top three competitors in terms of rank shows that the People’s Republic of China has increased its capital by about 9.3% in two years, while the United States has lost 1.3% of its capital in the same period. India, on the other hand, has increased its capital by about 8% in two years.
In the same way, over time, the economies of many countries have grown and suffered; this is the rule, if one side increases, the other side decreases. In this way, the world economy is moving forward on its own while maintaining balance.
Do fisheries have any impact on the world economy?
Let’s think about the global economy or the world economy; it can be said that the fisheries industry has not been able to occupy much space. But if we talk about the national economy, then the fishing industry is keeping the nation in check every day in two ways, the economy and the ecosystem.
The most used fish is in Asian countries but not less in other regions. Fish is a global food, eaten in almost all countries of the world. However, in terms of economic success, fewer countries produce and export fish.
Contribution of Fisheries and Riverine countries in the world economy
This task is easy for riverine countries. Bangladesh is the primary source of fisheries. 2% of Bangladesh’s export value comes from the fishing industry. In terms of Gross Domestic Product (GDP), the fisheries industry contributes 3.69% every year nationally and also contributes 22.60% to the agricultural GDP.
In the last ten years (2004-2005 to 2013-2014 FY), the fisheries industry has averaged 5.38% per year. Although the participation of the fisheries industry isn’t always the same, it increases or decreases.
In the last few years, the highest growth of 7.32% (2009-2010) and the lowest 4.04% (2013-2014) has been in the fisheries industry. 60% of Bengali people have fish in their daily diet. Although the affairs aren’t so simple, many fishing rules and regulations have to follow in Bangladesh.
Bangladesh transports fish to 55 other countries besides its own. In 2015, 45% of fish were exported to the European Union (EU), which is always on top in terms of imports. 80% of fish are exported to the USA and EU. Talking about the fish kingdom of Bangladesh, there’s a lot to say, but I don’t want to make the paragraph long. For more information!
What will be the next phase of the world economy?
The world economy is growing and not shrinking. While some countries are lagging economically, most countries are moving forward at their own pace. The main objective of the economy is to ensure all kinds of facilities and security to a country and its people. A country with a strong economy is more developed, standardized, and secure. Happiness cannot be bought with money, but the fact is that happiness cannot be purchased with anything, there is no way to buy happiness. Those who think that money is the root cause of misfortune do not know how bad the standard of living would be without money, how difficult it would be to survive. You never know what happiness is. So it can be said that the reputation of a country depends on the economy of that country.
What the future economy will look like cannot be said with certainty because the economy depends on people’s skills, attention, and effort. So it’s not possible to say now how much we’ll try in the future, at what stage our skills will be or how focused we’ll be. The world economy depends on people; we can turn the economy around if we want to. If the world economy continues to go wrong, its debt will come to our house, and if it continues to go to its right side, its liability will come to our home. Only we can help ourselves in our development. There is a proverb in Bengali, “Even a madman understands his good.”
What’s my role in the economy?
In economics, not only you and me, every human being, every animal has a different role. To survive, we have to earn money and buy daily necessities with that money. In this way, whatever we do is being added to the list of economies.
We do different things in human development; we invent new things; they play an essential role in the economy. The economy cannot run on its own; we are running the economy. And we should all continue this trend of the economy by doing these developmental works. Because as long as the economy is right, our standard of living will improve. When the economy collapses, the normal flow of life will be ruined, and everything will be more difficult.
By developing the economy, we are going with the gift of a more beautiful and better housing for our next generation. The economy is not just the flow of one generation, and this flow will continue until the end of humankind. In the end, it is hoped that we won’t do anything to harm ourselves and many more. We’ll always be aware of sacrificing ourselves.