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Well, the EU is just the largest economy in the wold.
by ExpiredLink 8y ago
Well, the EU is just the largest economy in the wold.
- the_duke 8y agoActually, the US is still the largest economy, with the EU closely behind and China a runner up. [1] Note though that the US will have a significant lead again next year when the UK leaves. [1] https://en.wikipedia.org/wiki/World_economy https://en.wikipedia.org/wiki/World_economy
- tzs 8y agoHold on a second. Which is larger depends on if you use nominal GDP or PPP GDP. Your link has tables for both, and the US and the EU swap positions in the two tables.
- the_duke 8y agoWell, I to me larger means in absolute terms. Purchase price parity is of course a valid view but not what I would consider in this context.
- jcranmer 8y agoTo elaborate a bit: Nominal statistics take into account the current exchange rate, while PPP ignores exchange rates and instead normalizes it in terms of things like Big Macs (albeit expressed in dollar terms instead). PPP is essentially an adjustment for cost of living, and so it generally makes more sense to use PPP when you're referring to per capita statistics (since you're generally trying for a sense of cost living anyways). Conversely, for comparing the size of economies or trade, you want to use nominal, as trade is conducted in nominal terms. There are reasons to go the other way, but these choices should be your first inclinations.
- the_duke 8y agoThanks for that explanation, which is much better than what I would have written. ;)