The 2008 Financial Crisis and Shifts in Economic Power
Abstract: This paper analyses shifts in economic power over the last half century, and in particular the growing importance of developing countries. The paper examines what effect the 2008 crisis has had on the distribution of economic power. We look specially at the importance of large emerging economies. It uses a number of indicators such as the share of countries in GDP, per capita GDP and exports. It also uses a set of indicators of economic power to estimate an index of economic power. This index is ordinal and the US remains the predominant economic power. We measure the distance of countries from the US on the basis of these indicators to examine whether there has been convergence with the US. We find that there have been few changes in the ranks of countries in economic importance. China has risen in the ranks. Only Korea shows a consistent steady progress upwards.