How big is the US economy? - June 06, 2018
The USA is the biggest economy in the world and a new chart shows how big is its $19.4 trillion GDP exactly. It’s enough to say that California alone has a bigger economic output than the UK. Texas would also make it into the global TOP 10 if it was an independent country.
The United States of America is the biggest economy in the world, but it’s hard to grasp how big it is in reality. Now a new paper made by AEI (a nonpartisan reasearch institute) makes it a little easier with comparing the GDP of American states to the GDP of other countries.
What $19.4 trillion means
The GDP of the USA is $19.4 trillion, a number hard to comprehend. It’s so huge that only China ($12 trillion) and the European Union as a whole ($17.3 trillion) can come close to it. To make the size of the US’ economy easier to understand, AEI created a special map.
Click on the image to see it in full resolution
“For each US state (and the District of Columbia), we identified the country closest in economic size in 2017 (measured by nominal GDP) and those matching countries are displayed in the map”, they write about the chart.
California alone is in the global top list
California is the biggest economy in the US. They alone have a $2.75 trillion GDP. That’s a huge figure: it’s more than the GDP of the United Kingdom. But what does that mean? Well, if the state of California was an independent country, it would be the 5th biggest economy on Earth. California would lead before the UK, India, France, Brazil and Italy, just to mention a few.
But it’s not only about California. Texas (the second strongest state) with its $1.7 trillion GDP would also make it into the TOP 10 if it was an independent country. New York (the third in economy) with its $1.55 trillion GDP would miss the TOP 10, but barely: it would be 11th on the global chart.
The US is still going strong
The United States may have new challengers, but it’s still the strongest country on Earth. As AEI mentions “the US produced 24.3% of world GDP in 2017, with only about 4.3% of the world’s population”. This means that the country is super effective when it comes to work power.
There might be several questions regarding the future. After such great expansions, for example, slowdowns may come, but the tax cuts and other spending may balance the negative effects of the trade war and other insecurities. This means that ups and downs may come, but the leading role of the United States is not in danger at the moment.
We also have reason to expect that the World’s most important currency, the US dollar will become stronger in the future. There are news which support that the US also has the most accessible oil globally thanks to new techniques in drilling. This can also help to maintain the status quo of the country in the future.
Disclaimer: This analysis is for general information and is not a recommendation to sell or buy any instrument. Since every investment holds some risk, our main business policy is based on diversification to minimize threats and maximize profits. Innovative Securities’ Profit Max has a diversified portfolio, which contains liquid instruments. This way, our clients can maintain liquidity, while achieving their personal investment goals on the long term.