Journey To The Economic Center Of The World

Tyler Durden's picture

The most recent decade of 2000 to 2010 has seen the fastest rate of change in the global economic balance in history. During this period, a recent McKinsey research article notes, the world's economic center of gravity has shifted by about 140km per year - about 30% faster than in the period after World War II when global GDP shifted from Europe to North America. The world’s center of economic gravity has changed over past centuries. But since the mid-1980s, the pace of that shift—from the United States and Europe toward Asia— has been increasing dramatically as China is urbanizing on 100 times the scale of Britain in the 18th century and at more than 10 times the speed. One has to wonder what the difference would be were it not for the flawed economic model adopted since the 1980s that relied on debt and asset price inflation to drive demand (as opposed to wage growth linked to productivity growth).


The center of economic gravity is calculated by weighting national GDP by each nation's geographic center of gravity. They then draw a line from the center of the earth through this center of gravity to the surface.