The world economy or global economy is the economy of all humans in the world, referring to the global economic system , which includes all economic activities conducted both within and between nations , including production , consumption , economic management , work in general, financial transactions and trade of goods and services . In some contexts, the two terms are distinct: the "international" or "global economy" is measured separately and distinguished from national economies, while the "world economy" is simply an aggregate of the separate countries' measurements. Beyond the minimum standard concerning value in production, use and exchange, the definitions, representations, models and valuations of the world economy vary widely. It is inseparable from the geography and ecology of planet Earth .
23-402: MB Doctrine is the foreign policy doctrine of former South Korean president Lee Myung-bak . The policy advocates engagement with North Korea and strong South Korea-United States relations . This Korea -related article is a stub . You can help Misplaced Pages by expanding it . Foreign policy Foreign policy , also known as external policy , is the set of strategies and actions
46-542: A state employs in its interactions with other states, unions, and international entities. It encompasses a wide range of objectives, including defense and security, economic benefits, and humanitarian assistance. The formulation of foreign policy is influenced by various factors such as domestic considerations, the behavior of other states, and geopolitical strategies. Historically, the practice of foreign policy has evolved from managing short-term crises to addressing long-term international relations, with diplomatic corps playing
69-675: A 2011 report stated that in terms of number of papers the share of English-language scientific research papers the United States was first followed by China, the UK, Germany, Japan, France, and Canada. In 2015, research and development constituted an average 2.2% of the global GDP according to the UNESCO Institute for Statistics . Metrics and rankings of innovation include the Bloomberg Innovation Index ,
92-702: A comparable metric other than GDP are the OECD Better Life Index rankings for different aggregative domains. The index includes 11 comparable "dimensions" of well-being: To promote exports, many government agencies publish on the web economic studies by sector and country. Among these agencies include the USCS (US DoC) and FAS (USDA) in the United States, the EDC and AAFC in Canada, Ubifrance in France,
115-479: A crucial role in its development. The objectives of foreign policy are diverse and interconnected, contributing to a comprehensive approach for each state. Defense and security are often primary goals, with states forming military alliances and employing soft power to combat threats. Economic interests, including trade agreements and foreign aid, are central to a country's role in the global economy. Additionally, many states have developed humanitarian programs based on
138-463: A part of the world economy, but for which there is, by definition, no legal market of any kind. However, even in cases in which there is a clear and efficient market to establish monetary value , economists do not typically use the current or official exchange rate to translate the monetary units of this market into a single unit for the world economy since exchange rates typically do not closely reflect worldwide value – for example, in cases where
161-417: A role in a country's foreign policy. In a democracy , public opinion and the methods of political representation both affect a country's foreign policy. Democratic countries are also believed to be less likely to resort to military conflict with one another. Autocratic states are less likely to use legalism in their foreign policies. Under a dictatorship , a state's foreign policy may depend heavily on
184-520: A single, comprehensive foreign policy for each state. Unlike domestic policy, foreign policy issues often arise suddenly in response to developments and major events in foreign countries. Foreign policy is often directed for the purpose of ensuring national security . Governments forming military alliances with foreign states in order to deter and show stronger resistance to attack. Foreign policy also focuses on combating adversarial states through soft power , international isolation , or war . In
207-475: Is common to limit questions of the world economy exclusively to human economic activity , and the world economy is typically judged in monetary terms, even in cases in which there is no efficient market to help valuate certain goods or services, or in cases in which a lack of independent research, genuine data or government cooperation makes calculating figures difficult. Typical examples are illegal drugs and other black market goods, which by any standard are
230-575: Is unclear, for example, how many of the world's 7.8 billion people (as of March 2020 ) have most of their economic activity reflected in these valuations. According to Maddison , until the middle of the 19th century, global output was dominated by China and India with Indian subcontinent being the world's largest economy from 1 C.E to 17 C.E. Waves of the Industrial Revolution in Western Europe and Northern America shifted
253-914: The United States , the European Union and the African Union . Despite high levels of government investment , the global economy decreased by 3.4% in 2020 in the midst of the COVID-19 pandemic , an improvement from the World Bank 's initial prediction of a 5.2 percent decrease. Cities account for 80% of global GDP , thus they faced the brunt of this decline. The world economy increased again in 2021 with an estimated 5.5 percent rebound. Telephones – main lines in use: 843,923,500 (2007) 4,263,367,600 (2008) Transportation infrastructure worldwide includes: The Royal Society in
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#1732782716286276-609: The Global Innovation Index and the share of Nobel laureates per capita . From the scientific perspective, economic activities are embedded in a web of dynamic, interrelated, and interdependent activities that constitute the natural system of Earth. Novel application of cybernetics in decision-making (such as in decision-making related to process- and product-design and related laws) and direction of human activity (such as economic activity) may make it easier to control modern ecological problems. One example for
299-478: The 18th century, due to extreme turbulence in European diplomacy and ongoing conflicts, the practice of diplomacy was often fragmented by the necessity to deal with isolated issues, termed "affairs". Therefore, while domestic management of such issues was termed civil affairs (peasant riots, treasury shortfalls, and court intrigues), the term foreign affairs was applied to the management of temporary issues outside
322-429: The 21st century, defensive foreign policy has expanded to address the threat of global terrorism . Foreign policy is central for a country's role within the world economy and international trade . Economic foreign policy issues may include the establishment of trade agreements , the distribution of foreign aid, and the management of imports and exports . Many states have developed humanitarian programs under
345-438: The concept of the responsibility to protect . Proponents of liberal internationalism believe that it is the duty of stronger and more well-off countries to assist and support less powerful countries. This idea is often associated with the idealist school of thought. Liberal internationalist support can take the form of defensive or economic support. Superpowers are able to project power and exercise their influence across
368-401: The development of foreign policy proposals, alternatives to existing policy, or to provide analytical assessments of evolving relationships. Several objectives may motivate a government's foreign policy. Foreign policy may be directed for defense and security, for economic benefit, or to provide assistance to states that need it. All foreign policy objectives are interconnected and contribute to
391-626: The government bargaining model that posits the foreign policy apparatus as several competing interests, and the organizational process model that posits the foreign policy apparatus as interlinked bureaucracies that each play their own role. Think tanks exist that study foreign policy specifically, including the Council on Foreign Relations in the United States and the Chatham House in the United Kingdom. World economy It
414-426: The preferences of the dictator. Dictators that interfere significantly with their foreign policy apparatus may be less predictable and more likely to make foreign policy blunders. The study of foreign policy considers why and how states interact with one another and maintain relations. Several schools of thought exist in the study of foreign policy, including the rational actor model based on rational choice theory ,
437-436: The responsibility to protect, supporting less powerful countries through various forms of assistance. The study of foreign policy examines the reasons and methods behind state interactions, with think tanks and academic institutions providing research and analysis to inform policy decisions. The idea of long-term management of relationships followed the development of professional diplomatic corps that managed diplomacy . In
460-533: The shares to the Western Hemisphere. As of 2024, the following 20 countries or collectives have reached an economy of at least US$ 2 trillion by GDP in nominal or PPP terms: Brazil , Canada , China , Egypt , France , Germany , India , Indonesia , Italy , Japan , Mexico , South Korea , Russia , Saudi Arabia , Spain , Turkey , the United Kingdom ,
483-574: The sovereign realm. This term remained in widespread use in the English-speaking states into the 20th century, and remains the name of departments in several states that manage foreign relations. Although originally intended to describe short term management of a specific concern, these departments now manage all day-to-day and long-term international relations among states. Think tanks are occasionally employed by government foreign relations organizations to provide research and advocacy in
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#1732782716286506-435: The volume or price of transactions is closely regulated by the government. Rather, market valuations in a local currency are typically translated to a single monetary unit using the idea of purchasing power . This is the method used below, which is used for estimating worldwide economic activity in terms of real United States dollars or euros . However, the world economy can be evaluated and expressed in many more ways. It
529-716: The world, while great powers and middle powers have moderate influence in global affairs. Small powers have less ability to exercise influence unilaterally, as they have fewer economic and military resources to leverage. As a result, they are more likely to support international and multilateral organizations. The diplomatic bureaucracies of smaller states are also smaller, which limits their capacity to engage in complex diplomacy. Smaller states may seek to ally themselves with larger countries for economic and defensive benefits, or they may avoid involvement in international disputes so as to remain on friendly terms with all countries. The political institutions and forms of government play
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