How big is the world economy?

We measure the size of the global economy by the combined GDP of all countries. An increase in the GDP over time means that the world economy is producing more goods and services.

On the graph we show the so-called "GDP in constant prices," more specifically using U.S. prices from year 2010. In other words, the GDP is calculated with prices for one year only. In that way, we capture only the increase or decrease of production and not the changes in prices from one year to the next.

It is clear from the graph that the global economy is growing rapidly. In 1970, the world produced about 19 trillion dollars worth of goods and services. By 2017, world production reached 80 trillion dollars. Global GDP had increased almost four times in four decades.

Notice also that the pace of growth is steady. Economic growth was similar in the 70's, 80's and thereafter. The pace of expansion is not accelerating or slowing down.

The steady pace of growth suggests something else too. While individual countries may experience ups and downs, when we look on the global level at all countries combined, the ups and downs seem to average out. Some economies may be in a recession, i.e. their production may be declining, but others are picking up the slack. In a few years, the reverse happens.

Notice also that the one significant dip in world production is in 2009 during the global financial crisis. However, by the next year in 2010, the global GDP had recovered and exceeded the levels before the crisis.

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