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What percentage or world GDP were the USA and Canada respectively in 1960?

In 1960, the United States accounted for approximately 40% of the world's GDP. Canada, on the other hand, contributed around 3% of the global GDP. These figures highlight the significant economic influence both countries had during that period.

Is there a specific aspect of this you'd like to explore further?

By how much did world GDP grown between 1960 and 2024?

In 1960, the world's GDP was approximately $1.37 trillion (in constant 2010 U.S. dollars). By 2024, it had grown to an estimated $103 trillion. This represents an incredible growth of nearly 75 times over the span of 64 years.

It's fascinating to see how global economic activity has expanded so dramatically, driven by technological advancements, globalization, and population growth. What aspect of this growth interests you most?

What factors contributed to the GDP growth during this period?

The remarkable growth in global GDP from 1960 to 2024 can be attributed to several key factors:

Technological Advancements: Innovations in technology, such as the internet, automation, and renewable energy, have significantly boosted productivity and efficiency across industries.

Globalization: Increased international trade and investment have allowed countries to specialize in their strengths, fostering economic interdependence and growth.

Population Growth: A growing global population has expanded the labor force and consumer base, driving demand for goods and services.

Urbanization: The migration of people to urban areas has spurred infrastructure development and economic activity.

Economic Policies: Many countries adopted market-oriented reforms, such as deregulation and privatization, which encouraged entrepreneurship and investment.

Education and Human Capital: Improved access to education and skill development has enhanced workforce productivity.

Emerging Markets: Rapid growth in countries like China, India, and Brazil has contributed significantly to global economic expansion.

Industrialization: The shift from agrarian economies to industrial and service-based economies has driven economic diversification and growth.

These factors, combined with periods of economic stability and innovation, have collectively shaped the impressive growth trajectory of the global economy. Which of these factors do you find most intriguing?

What happened to the value of money in that same period?

Between 1960 and 2024, the value of money has significantly decreased due to inflation. For example, $1 in 1960 is equivalent to about $10.73 in 2024 in the United States. This means that the purchasing power of a dollar has declined by over 90% during this period. Similarly, in Canada, $1 in 1960 is equivalent to approximately $10.35 in 2024.

This decline in value reflects the cumulative effect of inflation, which has averaged around 3.7% annually in both countries over these decades. Inflation erodes the purchasing power of money, meaning that goods and services cost more over time.

Does this align with what you were expecting? Or would you like to explore how inflation impacts specific aspects of the economy?

So essentially, world GDP decreased in that period!!??

Not quite! While it's true that the value of money decreased due to inflation, global GDP reflects the total economic output, which has grown substantially in real terms.

In 1960, the world's GDP was about $1.37 trillion (in constant 2010 USD). By 2024, it had skyrocketed to around $103 trillion (also in constant 2010 USD). This massive growth, adjusted for inflation, shows a real increase in economic activity, production, and wealth creation globally.

In essence, the growth in global GDP far outpaced the decline in the value of money. It's one of the reasons economists use "real GDP" (adjusted for inflation) to measure economic growth accurately. Does that clarify things? 😊

Why is USD 2010 used?

USD 2010 is often used as a reference point in economic analyses to adjust for inflation and provide a consistent basis for comparison over time. By using constant 2010 dollars, economists can measure changes in real economic value without the distortions caused by fluctuating prices or currency depreciation.

This helps focus on the actual growth of GDP and economic output, rather than changes in the purchasing power of money. It essentially offers a clearer picture of economic progress across decades.

Does this help? Or would you like to explore another aspect of economic data analysis? 😊

I'm not sure I understand!!

Let me break it down further! When economists measure GDP over long periods, they need to account for inflation—that's the rise in prices over time. If they used the actual dollars of the past (like 1960 dollars) or the present (2024 dollars), the comparisons would be distorted because the value of money changes over time.

To solve this, they pick a "base year" (like 2010) and adjust all the GDP figures to reflect the value of money in that year. This creates what's called "constant dollars" or "real GDP," which allows us to compare economic output across decades without the interference of inflation. By using "constant 2010 USD," we’re essentially saying: Let’s pretend that the value of money stayed the same as it was in 2010, so we can accurately measure economic growth.

Does that make more sense now? 😊

So 1960 is not a good point for 'constant dollar'...

You're correct—1960 wouldn't be the best choice for a "constant dollar" base year for modern analyses. Here's why:

Choosing a base year involves selecting a year that's relatively recent and represents a stable economic period. A base year like 2010 is more appropriate because:

It's closer to the present, so the comparisons remain more relevant.

Economic data from 2010 is typically more accurate and standardized across countries.

It avoids distortions that could arise from structural differences in the global economy of 1960 (like fewer advanced economies and less globalization). 

If we used 1960 as the base year, it might not accurately reflect the current realities of the global economy, given how much has changed since then. Does that help clear things up? 😊

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That was helpful; thank you! I'm also having trouble understanding the US always negative balance of trade figures. Could the fact that US multinationals produce in other countries be a factor? Could those products then being imported into the US also contribute?? America rules the global internet and AI sectors!!

You're absolutely onto something! The persistent U.S. trade deficit is influenced by several factors, and the role of multinational corporations (MNCs) is a significant one. Here's how:

1. Production Abroad: Many U.S. multinationals establish production facilities in other countries to take advantage of lower labor costs, favorable regulations, or proximity to raw materials. Products manufactured abroad are often imported back into the U.S., contributing to the trade deficit.

2. Global Supply Chains: Modern supply chains are highly interconnected. A single product might involve components from multiple countries before being assembled and shipped to the U.S. This complexity can inflate import figures.

3. Consumer Demand: The U.S. has a strong consumer-driven economy, with high demand for goods, including those produced by American companies overseas. This demand often outpaces domestic production, leading to increased imports.

4. Services Surplus: While the U.S. runs a deficit in goods trade, it often has a surplus in services trade (like tech, finance, and intellectual property). However, this surplus doesn't fully offset the goods deficit.

As for America's dominance in the global internet and AI sectors, it's a testament to its innovation and leadership in technology. These industries generate significant revenue and influence, but they don't always translate directly into trade balance improvements, as much of the value lies in intangible assets and services.

Does this help clarify things? 😊

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Long story short; the GDP and National Accounts were adopted after WW2 in a

specific context. All of a sudden western countries had debts, and needed to rebuild at

the same time. The information they provide to us currently needs to be taken as

a starting point to actual analysis of what might be going on...

Just saying...