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Thursday, December 3, 2009

Same Share of a Bigger Pie

The graph below comes from this blog post by Professor Mark Perry:

What the graph shows is that the US share of global GDP has remained remarkably constant over the past half century, during a time when global output increased by more than three times. This is evidence that debunks the myth that gains in places like China and India come at the expense of the US. The global economy is not a zero sum game. Professor Perry sums it up perfectly:

"Because of advances in technology, innovation, and significant improvements in U.S. productivity, America's share of total world output has remained remarkably constant at a little more than 25%, despite the significant increases in output around the world, especially in Asia."