Friday, September 23, 2011

The Evolution of GDP by Region


I think this widget from the OECD Factblog provides a fascinating view of economic trends.

There was a long decline of the GDPs of China and India as a percentage of the world total GDP from the beginning of the graphs until the second half of the 20th century when those countries started to regain GDP share.

Europe's share grew during the 19th century and declined in the 20th.

Japan's share declined through most of the 19th century, stabilized, and then grew until World War II. In the post war years, Japan's GDP grew very rapidly as a share of the global GDP, and then peaked and began to decline in the last decade or two.

The growth of the U.S. GDP was very strong until the Great Depression when it declined precipitously. It grew very rapidly during World War II, primarily because of the rapid growth in U.S. economic output, but also due to the reduction of output in other industrialized nations. A long decline in the second half of the 20th century has been reversed in recent decades.

The Great Depression and World War II both depressed the economies of the rest of the world.

Be a little careful with the data, since it is not clear exactly how it was developed, and what kind of measure of GDP is being used (nominal, PPP). The trends, however, are clear. The Depression and world wars are bad for the global economy. Europe, which dominated the global economy in 1900 has seen its productivity in a long decline through the 20th century, and its influence in world affairs suffer correspondingly.

India and China, now with almost a third of global population, failed to grow with the developed nations for a very long time, but are now growing more rapidly that the global economy as a whole, beginning to recapture some of their past importance.

The persistence of these trends over many decades would tend to support Niall Ferguson's analysis that we are dealing with major institutional innovations and the time needed for their implantation and diffusion.

One suspects that governments do not take well to a long term reduction in international influence related to a long term reduction in comparative economic power of their nations. On the other hand, governments of nations that are experiencing a decades long increase in relative economic power seem likely to flex their political muscle.

Incidentally, the graphics provided by tableau.public are very good.

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