‘Economics is a study of man in the ordinary business of life. It inquires how he gets his income and how he uses it. Thus, it is on the one side, the study of wealth and on the other and more important side, a part of the study of man’.
Principles of Economics (1890), Alfred Marshall
The economy is the enormous set of activities that are interconnected, and which helps in outlining how the limited resources are distributed in a geographical area. The existence of an economy is based on satisfying the needs and wants to its partakers. The modern day word Economics is derived from the Greek word ‘Oikonomia’ which means ‘household management.’
In this blog, we shall discuss the ten most powerful economies of the world by nominal GDP.
- The United States of America- The world’s most powerful economy by nominal GDP, the US has abundant natural resources. Many countries use the US currency as their official currency, while other uses it as their de facto currency. The United States of America has a mixed economy. Presidential elections took place in 2016, and the people of the US chose Donald Trump who is likely to take charge in January 2017. With the arrival of Trump who belongs to Republican Party the economy of the United States has seen severe changes. The economists around the world have predicted that Trump government will likely to boost the US economy, but at the same time, his resistance towards free trade and few other policies against non-US people will give a hard time to all the economies in the world.
- China- China has a socialist market economy, wherein the economy is dominated by the state-owned institutions along with the open-market economy. Though China advocates a socialist economy, but of late efforts are being made to shift towards a capitalist economy. These days, more or less everything is manufactured in China. China plays a significant role in the International Trade and is also the fastest-growing user-goods market in the world. Till 2015, China was considered being the fastest-growing economy, but a sudden crash of the Chinese stock market and the devaluation of Yuan impacted the economy of the country adversely. China is criticized all over the world for its unfair trade practices. In 2016, the Thirteenth Five-Year Plan has been implemented to achieve its incessant commerce and industry expansion.
- Japan- Japan is often considered to be the most innovative country in the world. The technological expansion and the knowledge of Japanese people have made it possible for the country to maintain its competitive edge over other economies. Japan is also the largest manufacturer of electronic goods and the third largest manufacturer of automobiles. Japan is a peaceful nation, where people use their energy to find out newer ways to make life better for others. As per a report published in 2015, 54 of the Fortune Global 500 companies are based in Japan. The country is blessed with many natural resources, but they were of lower quality. Hence the economy shifted towards manufacturing and processing of raw materials imported from other nations. Japan has adopted a free market economic policy.
- Germany- Germany is the fourth largest economy in the world based on the nominal GDP and the largest economy of the European continent. Germany follows socialist-market economy approach. After China and the US, Germany is the third largest exporter in the world. The German automotive industry is the most innovative and competitive automotive industry in the world. Almost all the big automotive players are based in Germany only, and this is one the reasons that Germany is considered to be the birthplace of the automobile. Germany is a service based economy as it contributes about 70% of the total GDP.
- United Kingdom- 80% of the GDP is contributed by the service sector in the UK. Till 2016, The UK was a part of the European Union, but in June the country voted to leave the Union, which caused sudden tribulations in the economies of the world. The national currency of the UK, the pound sterling witnessed a great fall to the US dollars in the last 31 years. The country was struggling to cope with the Great Recession that occurred in 2008, and again in 2016, it faced another bitter trial which put the economic health of the UK at stake. There were several inter-nation trade relations among the EU nations, but after its decision of leaving the EU, the UK is exposed to certain trade intimidation. However, it would be too early to comment on the long-term consequences of this resolution.
- France- Along with the chemical industry, Tourism industry is the leading industry in France. France is the most visited country in the world. The headquarters of Organization for Economic Co-operation and Development (OECD) is located in the financial capital of France that is Paris; hence the economic progression of the country cannot be underestimated. After Europe, France has the second largest number of Millionaires.
- India- India is one of the firmest growing service sectors. At present, India has the largest young population, which makes it one of the most promising developing economies in the world. India replaced the People’s Republic of China as the fastest growing economy in the world around the end of 2014. The Make in India program started by the Indian Prime Minister, Narendra Modi has made India an instant favorite of several countries. India has seen several economic turbulence in the past, but the of late policies and proactive decisions of the existing government have put Indian economy in a good position on the global stage.
- Italy- Italy is one of the instituting members of the EU and the OECD. Italy has had its share of economic highs and lows over a period. The labor laws are stringent; the legal system is sluggish, and the complicated taxation policies have contributed to the breakdown of the Italian economy. The Great Depression is not the sole reason of Italy’s disgrace, but the subsequent EU debt crises, which started somewhere in the last quarter of 2009. The economy of Italy has reached several milestones, but the structural and non-structural problems have outdone everything.
- Brazil- Brazil is the ninth-largest economy in the world based on the nominal GDP. From 200 till 2012, Brazil’s economy was the fastest growing economy in the world. The economic health of the country deteriorated in 2013, and since then, Brazil couldn’t pick up economically. Corruption, political upheavals are some of the major factors that resulted in the collapse of one of the greatest economies in the world. President, Dilma Rousseff was removed from her office and was replaced by Michel Temer. Mr. Temer was expected to bring back the economy to its full vigor, but his ministers were found guilty in scandals, and many of them resigned. The political uncertainty persisted, and the economy could not recover.
- Canada- The arrival of Donald Trump brought bad luck for the Canadian economy. Canada, Mexico, and the US are bound by the North American Free Trade Agreement (NAFTA), which has provided several aids to Canada and Mexico. The arrival of Donald Trump has threatened the Canadian economy as Canada has several economic ties with the US. In case, Trump shreds the policies of his predecessor; Canada would be in a terrible condition. During his presidential debates, Trump has talked negatively of Canada. The future of Canadian economy is dependent on the US as the latter is the largest trading partner of Canada.