Major Economic Events Timeline, in one Visual
The world’s economy is seemingly poised for a slowdown, due to factors such as shifts in consumer spending, decreased global investment, and escalating tensions in the trade war between the U.S. and China. Historically, a variety of changes in international politics, technology, and monetary policy have influenced the trajectory of the world’s economy. Our newest visualization offers a timeline of the world’s economic history, with an emphasis on how worldwide GDP by purchasing power parity (PPP) has changed in response to major world events.
- In 2018, worldwide GDP by purchasing power parity was more than $121 trillion. In 1 A.D., it was only $184.1 billion.
- Economic growth increased exponentially after World War II, nearly tripling worldwide GDP from 1940 to 2018.
- Advances in technology such as the Internet have also been responsible for some of the largest jumps in worldwide GDP. Between 1993 and 2018, worldwide GDP more than doubled.
For this visualization, we retrieved recent GDP by PPP data from the World Bank. To obtain the historical GDP numbers, we applied the period variation calculated with Maddison’s historical GDP database, which provides information on economic growth over the long run. All values are expressed in constant international dollars from 2011. The x-axis of the timeline lists the years ranging from 1 A.D. to 2018, while the y-axis lists the world’s GDP in trillions. The line showing the world’s economic growth over time is shaded in purple, with lighter shades of purple representing lower GDP and darker shades representing higher GDP. Interspersed along the chart, we have also included pink circles highlighting major events that have had an impact on the world’s economy.
The way that people exchange goods and services has changed over time. In prehistoric times, bartering was the main economic activity. Over time, civilizations developed coins and paper money as currency to be used for trade. Fast forwarding to the twentieth century, credit cards made it even easier for consumers to make purchases and generate more demand for products and services. In addition, the rise of cryptocurrency in the twenty-first century has also revolutionized the way we use money across borders and could play an even greater role in the future.
Another theme in the timeline of the world’s major economic events is the increased interconnectedness of different nations’ economies. The rise of mercantilism after Columbus’ contact with the New World and the creation of Dutch East India Company affected how European nations viewed their own economies in relation to each other as well as colonized parts of the world. Global interconnectedness has also caused economic strife among countries in more recent years. For example, the OPEC oil embargo in the 1970s caused massive stagflation in the U.S., while the current trade war between the U.S. and China is affecting workers and consumers in the world’s two largest economies. As we rapidly approach a new decade, it will be interesting to see what new events will continue to shape the world’s economic history.
What other events do you think have shaped the world’s economic history? Please let us know in the comments.