| 2024: | 26.3% |
| 2020: | 25.0% |
| 1980: | 25.5% |
IMF World Economic Outlook 2024, currency basis
Two ways to count and divide “all the money in the world”:
One way is to ask: How much money do people make? And where are they making it? The International Monetary Fund’s beloved “World Economic Outlook” database, updated for 2024 last Thursday, reports that “World GDP”, having cleared the $100 trillion mark in 2022, hit $104.79 trillion in 2023 and will likely reach $109.53 trillion this year. (GDP on “currency basis”; see below for an asterisk and the alternative approach.) The WEO is particularly upbeat on the United States, noting that “the U.S. economy has already surged past its pre-pandemic trend” and continues to outpace its peers with a GDP jump from last year’s $27.4 trillion to $28.8 trillion. The U.S.’ projected $1.4 trillion nearly equals the $0.87 trillion the IMF’s forecasters project for China and the $0.67 trillion for the European Union combined. To put this in less abstract terms, the $1.4 trillion in growth roughly equals (a) the total national output in the Spain/Saudi Arabia/Indonesia tier; or (b) the combined output of the six New England states, from the 1000 biotech firms and the 350 universities through Red Sox/Celtics/Bruins/Patriots merch, lobsters and maple syrup, Freedom Trail and foliage tour receipts, etc.. A table of the IMF’s growth forecasts for 2024:
| World Growth 2024: | +$4.74 trillion |
| United States: | +$1.42 trillion |
| China: | +$0.87 trillion |
| European Union: | +$0.65 trillion |
| Latin America: | +$0.43 trillion |
| India: | +$0.36 trillion |
| ASEAN: | +$0.29 trillion |
| All else: | +$0.62 trillion |
Assuming the IMF’s projections are pretty close to reality, this leave with U.S. with 26% of world output – up a point from the 25% share in 2020, and essentially the same as their 25.5% calculation for 1980. (Though still below the 30% reached at the peak of the 1990s boom.) So, lots of changes this year and over time; but the various ups and downs of the last two generations seem to have left a division of output and income more stable than many might guess.
A second approach would be to ask: How much money have they got? Credit Suisse, in its most recent “Global Wealth Report” (out last summer, with estimates for the year 2022) thinks there’s about $454 trillion in privately held “wealth” — that is, real estate, stocks, CDs, jewelry, cars, bank accounts, coins and bills, and so on — in the world. About $140 trillion, or 31% of the total, is in the United States. By comparison, their 2012 report guessed at $241 trillion in world wealth, with $72 trillion or a basically equal 30% in the United States. As with GDP, though Credit Suisse’s reports begin only in 2010, the U.S.’ share looks pretty stable over time, while (as with GDP) the European and Japanese shares have drifted a bit down, and those of China and India up.
The IMF’s World Economic Outlook 2024 on global growth, pandemic recovery, risks, and more.
… and has some advice from IMF economists, trying their best to rain at least a little on the U.S.’ parade:
The strong recent performance of the United States reflects robust productivity and employment growth, but also strong demand in an economy that remains overheated. This calls for a cautious and gradual approach to easing by the Federal Reserve. The fiscal stance, out of line with long-term fiscal sustainability, is of particular concern. It raises short-term risks to the disinflation process, as well as longer-term fiscal and financial stability risks for the global economy.
… and the accompanying WEO Database has all the numbers.
And the promised *asterisk*: GDP measurements come in two versions. The “currency basis” method used above, which compares and adds up GDP based on value in U.S. dollars. The alternative, “purchasing-power parities”, tries to figure the size of economies by assuming comparable prices for comparable goods and local services.
The currency-basis method makes the U.S. look a bit unreasonably strong, as the past year’s rising dollar magnifies the apparent U.S.’ growth relative to other countries. Extreme cases include Japan and sub-Saharan Africa, where declines in currency value vis-à-vis the dollar produce supposed GDP “declines” of $100 billion in Japan and $34 billion in sub-Saharan Africa. In reality, the IMF guesses Japan’s economy will grow by 0.9%, and Africa’s by 3.8%. Using “purchasing-power parities” yields a less dramatic picture, in which Japan gets $210 billion in growth and Africa $340 billion, and the U.S.’ $1.4 trillion makes up a sixth of all world growth rather than a third. Still a good year though.
U.S. government perspectives:
Treasury Secretary Janet Yellen on the economic outlook at home and worldwide.
The White House’s Council of Economic Advisers on U.S. employment and wage patterns.
… and also from CEA, the annual big-picture Economic Report of the President.
More from the WEO:
Some good news: IMF has Ukraine’s economy growing at 3.2%, after 5% in 2023, with Ukraine’s strategic defeat of Russia’s Black Sea fleet reopening grain and manufacturing trade. The view from Kyiv.
Growth rates by country: The WEO’s growth estimate spectrum, from the four hottest economies to the four most troubled, has Guyana’s energy-driven 34% growth at the top, followed by Palau’s 12.4%, Niger’s 10.4%, and Senegal’s 8.3%; at the less happy pole are Kuwait’s -1.4%, Argentina’s -2.8%, Haiti’s -3.0%, and Sudan’s -4.2%.
Largest economies: The world’s ten largest economies (currency basis) are the U.S. at $28.8 trillion, China at $18.5 trillion, Germany $4.6 trillion, Japan $4.1 trillion, India $3.9 trillion, the U.K. $3.5 trillion, France $3.3 trillion, Brazil and Italy $2.3 trillion each, and Canada $2.2 trillion. Together they sum to $73 trillion, about two-thirds of world GDP. Among this group, India has the fastest-growing economy tiara at 6.8%, with China second at 4.7% and the U.S. third at 2.7%.
And how much is “all the money in the world”?:
Credit Suisse’s privately held “wealth” count doesn’t include the wealth held by governments — navies, buildings, national parks and public lands, state-owned enterprises, and so on. No estimate for this seems to exist, but the World Bank says the public-sector share of GDP worldwide is about 16.5%. This suggests a private-sector-wealth-to-private-sector-GDP ratio of about 5.2 to 1. If the public sector ratio is similar, world “wealth” would be somewhere around $550 trillion. If it’s larger, total wealth might be in sight of the $1 quadrillion mark. Credit Suisse counts wealth.
Or, how much actual cash is hanging around? The Federal Reserve reports about $2.25 trillion in U.S. paper cash, about a third of the $6.5 trillion in worldwide bills and coins reported by the Bank of International Settlements. The “M2” “broad money” total, including bank accounts and CDs, is more like $21 trillion in the U.S., and based on the World Bank’s calculation of about 143% of world GDP, would be about $150 trillion worldwide. The Federal Reserve counts dollar bills.
… the World Bank matches cash and bank accounts against GDP.
… and the Switzerland-based Bank of International Settlements tallies $6.5 trillion in bills and loose change, and $7.5 trillion in daily currency exchange.
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
