Changing Economic Power in the World Economy

Abstract: The paper finds that economic performance of most regions of the world economy except Asia, both East and South, has suffered since the 1973- 74 price rise. China and India have been the fastest growing economies, and have been growing faster than the other emerging economies, Brazil, Mexico, Russia and S. Africa. Continuation of these trends is likely to result in the emerging economies,accounting for a much larger share of the world’s GDP than they do currently. The largest part of this increase would be because of China’s performance with India also contributing a significant portion. The increase in the shares of the other economies would be more limited. While China and would significantly narrow the gap in the size of their GDP with that of the US they would continue to lag substantially behind the US in per capita income. It is therefore essential that these economies continue to grow rapidly even beyond the period of analysis here for per capita incomes of these economies to catch up with that in the US.

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