Note: In 1990 Dollars, purchasing power parity.
Source: Data compiled by A. Maddison, University of Groningen.

Share of the World's GDP, 1AD - 2008

Historically, the world's balance of wealth undertook two major shifts, one triggered by the industrial revolution (early 19th century) and the other, unfolding, triggered by globalization (late 20th century). Prior to the industrial revolution, the economic size of a nation was directly proportional to its population, which was dominantly rural. Agricultural surpluses permitted an initial division of labor and was used to support various crafts, administrative and service activities. The capacity to grow food was therefore the foundation of wealth of nations, since the greater the food surplus the larger the potential base for non-agricultural activities. Since China and India were mostly relying on rice cultivation (the most productive form of agriculture) supported by extensive irrigation systems, they achieved early in history the world's largest populations and correspondingly the largest GDP. They jointly accounted for 50% of the world's GDP up to the early 19th century. This situation would endure until the industrial revolution.

The mechanization of production brought by the industrial revolution broke the relationship between population and economic output. European countries and their offshoots (e.g. the United States), which historically had a modest share of the global GPD, were able to become the world's dominant economies, some projecting this influence through colonial empires. By 1900 five nations accounted for about 45% of the world's GPD (United States, Great Britain, Germany, France, Italy and Japan), with the share of China and India collapsing to less than 20%. By the 1970s, China and India jointly accounted for less than 9% of the world's GDP in spite of their surging populations and the United States peaked at 22% of the world's GDP.

In the late 1980s and early 1990s a rebalancing of the world's GDP began. By undertaking their own industrial revolution within an integrated global economy China and later India were able to gradually reclaim a share of the GDP more in line with their populations. It could be postulated that once this rebalancing is completed and that the global economy will reach a new equilibrium where economic output will be correlated with population, as it is was before the industrial revolution.

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