The United States is the world’s largest economy by nominal GDP, with a nominal GDP of $21.4 trillion in 2021, which is about 24% of the global economy . However, the US share of the global economy has been declining over time. In 1960, the US accounted for 40% of the global economy, but this share has been cut almost in half since then, despite a rising national GDP and being the birthplace of some of the biggest companies on the planet . As of 2019, the US made up almost a quarter of the global economy . The decline of America’s contribution to global GDP has been slow and uneven, with crests and troughs along the way. Between 1965 and 1980, the country’s share fell by 13 percentage points, mainly due to stagflation of the 1970s. This decline was followed by Reaganomics and a period of strong recovery, which helped propel the US share of the global economy back up to 34% by 1985. The whipsawing would continue. Between 1985 and 1995, the US share fell by another 11 percentage points, only to bounce back to a local peak of 30% by the year 2000. Since the beginning of the 21st century, growth in many developing markets has continued at a rapid pace, and the US share of the global economy has decreased as a result. Until 2005, the US still accounted for 28% of global GDP, but the Global Financial Crisis left a big dent, and its share fell to 23% by 2010. It has since remained relatively stable at 24% .
In the third quarter of 2023, the US dollar’s share in the global central bank reserves sunk to 59.2% . This trend is part of a larger de-dollarization trend, which has been ongoing for years. The US dollar has been the world’s dominant reserve currency since the end of World War II, but its share of global reserves has been declining in recent years. The US dollar’s share of global reserves peaked at 72.7% in 2001 and has been declining ever since .
It is important to note that the COVID-19 pandemic has changed the course of the global economy, with most countries experiencing a recession in 2020. America’s economic position will depend on how quickly it can recover compared to the rest of the world .