Which is really the world's largest economy?

I have just read a piece on a news website which said that "the worlds biggest economy" was in trouble. No, it's not. It is doing fine. Though the worlds second biggest economy is in big trouble.

Many people have not noticed that the EU has overtaken the USA and is now the worlds economic giant. See the chart below.

The values are at purchasing power parity. This is the most accurate way of making the comparison.

If you value GDP at current exchange rates the EU's GDP is much larger than that of the USA because of the dollars decline and the increase in the value of the euro. Even the Eurozone's GDP is larger than that of the USA [The Eurozone consists of those countries which have adopted the euro as their currency. It is smaller than the EU because it excludes the UK and some smaller countries who are in the EU but not part of the Eurozone.].

I recently asked a group of people which had the largest population; the EU or the USA. Most guessed the USA. In fact, the EU's population and labour force is far larger. See the chart below.

All the values are from the CIA Factbook.

The GDP gap between the EU and the USA is going to widen as the USA goes into long term economic decline. That is why it always surprises me when our 'Little Englanders' want us to leave the EU and ally ourselves more with the USA. After all, its not often that rats want to climb aboard a sinking ship.

Europa Uber Alles