Which is the largest economy in the world? … It depends!
Published in
1 min readOct 26, 2018
The United States is the biggest economy in the world if we compare Gross Domestic Product (GDP) at market exchange rates. The United States is followed by China, Japan, and India. However, if we make the comparisons using purchasing power parities, these rankings do not hold. At PPPs, China’s economy in 2017 was 25 percent bigger than United States’, and surpassed the United States to be the largest economy in 2013. India’s economy surpassed that of Japan in 2009. The change effect of adjusting for the priced differences can be seen by comparing the solid lines and the dotted lines in the figure below.
