Maybe Economic Size Does Matter

This previous CD post about the size of the U.S. economy, and Greg Mankiw's post with a link to a video about the size of the U.S. economy vs. oil-producing Gulf States, inspired me to do the analysis in the chart above (click to enlarge). Data on 2006 GDP by country were obtained here, and data on GDP by metropolitan area were obtained here from the BLS.

Consider that Iran's entire economy ($222 billion) is about the same size as Detroit ($213 billion), Qatar ($47 billion) is slightly smaller than Birmingham, AL and Jordan is just slightly larger than Flint, MI.

Bottom Line: We lose sight of how enormous the U.S. economy is (GDP of $14,000,000,000,000) in absolute value, and also have probably never even considered that individual cities in the U.S. like San Diego produce as much economic output per year as the U.A.E. And even with the world's second largest reserves of conventional crude oil, the annual economic output of Iran is barely larger than Detroit's economy.

The huge size of the U.S. economy ($14 trillion), diversified across a large number of industries and an enormous geographical area, must provide a high degree of economic stability, and should help stabilize the economy against recessionary pressures. When it comes to size, strength and stability, no other country in the world even comes close. A $14 trillion economy can take a lot of shots and remain standing, and it'll take more than a subprime mortgage crisis and housing troubles to knock Goldilocks down.