The Bullish Case for the U.S. Economy: Our Ability to Be Productive and Innovative in a Tough World
How is this possible given the rapid rise of China and India? Mr. Doll says the increase in emerging markets' share of the world economy has come "at the expense of mostly Japan and a bit Europe. The U.S. has held its own, which I think is a statement of our ability to be productive in a tough world."
MP: The chart above of world GDP shares (data here) from 1969 to 2010 confirms Mr. Doll's claim about America's amazingly stable share of world output, which has remained at about 26% for more than forty years. As I've indicated on the chart, the U.S. share of world GDP in 2010 (26.3%) was exactly the same as in 1975 (26.3%). It's also interesting to note that: a) the shares of world GDP in 2010 were almost exactly the same for the U.S. (26.3%), the EU-15 (26.4%) and Asia/Oceania (26.6%) and b) the shares of world GDP for Latin America and the Middle East + Africa have remained relatively stable since 1969.
The biggest change over time has been the gradual decline in the EU-15's share of world GDP from almost 36% in 1969 to less than 27% by 2010, while Asia/Oceania's share has increased from less than 15% in 1969 to almost 27% in 2010. The fact that America's share of world GDP has remained constant over time is a testament to how America's dynamism, resiliency, and culture of innovation and entrepreneurship have enabled us to be "productive in a tough world." In contrast, the EU-15's declining share of the world economy demonstrates the failure of anti-growth, European-style socialism with high taxes and excessive regulations that creates a culture of dependency and entitlement.