World Economy

In the present world, the term world economy is most dynamic and exciting topic to talk about. It is dynamic because it consistently experiences ups & downs. The heart throbbing depression in the 1930s, the oil crises in 1970s, failure of Latin American economy in 1980s, the failure of the centrally planned economics at the end of 1980s, and the collapse of world economy recently is the significant example of downfall of the world economy. But after every fall, the rise of world economy is also the evidence of economy growth. Above all, due the advancement of technologies and communications, the world economy is gradually becoming more global.

However, if take a look of our past, we find world population has been risen 22-times, per capita income has been grown 13-times, and the world GDP about 300-times. Specifically after the 16th centaury, the growth of per capita income is not going on parallel with the population growth, it is unreasonably slower.

In fact, the measurement of per capita income growth is parameter to find out the welfare of the person. Though, in the recent past, the advancement of medical science and subsequently increase in living standard, the life expectancy has been increase remarkably.

Nonetheless, the growth process is not similar across the world rather it is unexpectedly uneven; hence, on the basis of the development, the whole world is classified into developed countries (i.e. North American countries, European countries, etc.), developing countries (i.e. Asian countries, some of the African countries, and Latin American countries etc.), and underdeveloped countries (i.e. many of the African countries and some of the Asian and Latin American Countries)

It is general to limit the term world economy exclusively to human activity (particularly economic), and hence the world economy is characteristically judged in monetary terms. Even in the cases in which there is no resourceful market to valuate certain goods and services, or in the situations in which there is no facility of independent research or government co-operation that makes difficult to establish the proper figures or data, the economists and other scholars measure the world economy in terms of monetary value. The most favorite term used by the economists to measure the economic growth of any country is Gross Domestic Product or simply GDP. It is also measured on the basis of Purchasing Power Parity or PPP.

In spite of so much ups and downs, the sustainability of world economy is going on is only due to:

1. diffusion of human settlements over the fertile land and also making the infertile land fertile with the help of technology.
2. the innovation of new technology and respective plan and policies
3. the promotion of international trade and exchange of capital.