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"&amp;lt;p&amp;gt;In 2015, &amp;lt;a href=&amp;quot;https://www.thebalance.com/china-economy-facts-effect-on-us-economy-3306345&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;1&amp;quot;&amp;gt;China&amp;lt;/a&amp;gt;\u00A0became the world&amp;amp;#39;s largest economy for the first time in modern history. It produced $19.5 trillion in economic output. The &amp;lt;a href=&amp;quot;https://www.thebalance.com/what-is-the-european-union-how-it-works-and-history-3306356&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;2&amp;quot;&amp;gt;European Union (EU)&amp;lt;/a&amp;gt;\u00A0was in second place, producing $19.1 trillion. Together, China and the EU generate 33.9% of the world&amp;amp;#39;s economic output of $113.7 trillion.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;The United States fell to third place, producing $17.9 trillion. The world&amp;amp;#39;s three largest economies combined produced $56.5 trillion. That&amp;amp;#39;s nearly half of the world&amp;amp;#39;s total economy. No other economy is even close to any of these three. The fourth largest economy was &amp;lt;a href=&amp;quot;https://www.thebalance.com/india-s-economy-3306348&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;3&amp;quot;&amp;gt;India&amp;lt;/a&amp;gt;, producing $8 trillion. &amp;lt;a href=&amp;quot;https://www.thebalance.com/japan-s-economy-recession-effect-on-u-s-and-world-3306007&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;4&amp;quot;&amp;gt;Japan&amp;lt;/a&amp;gt;\u00A0was fifth, at $4.6 trillion. &amp;lt;a href=&amp;quot;https://www.thebalance.com/germany-s-economy-3306346&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;5&amp;quot;&amp;gt;Germany&amp;lt;/a&amp;gt;, the strongest country in the EU, produced $3.8 trillion. (Source: CIA World Factbook, Rank Order GDP)&amp;lt;/p&amp;gt;&amp;lt;h3&amp;gt;How Economies Are Measured&amp;lt;/h3&amp;gt;&amp;lt;p&amp;gt;Don&amp;amp;#39;t start swapping\u00A0&amp;lt;a href=&amp;quot;https://www.thebalance.com/the-u-s-dollar-3305729&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;6&amp;quot;&amp;gt;U.S. dollars&amp;lt;/a&amp;gt; for &amp;lt;a href=&amp;quot;https://www.thebalance.com/china-s-currency-the-yuan-or-renmimbi-3305906&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;7&amp;quot;&amp;gt;Chinese yuan&amp;lt;/a&amp;gt; and learning Mandarin yet. These three figures are very close. The estimates change throughout the year.\u00A0&amp;lt;a href=&amp;quot;https://www.thebalance.com/china-s-economic-growth-cause-pros-cons-future-3305478&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;8&amp;quot;&amp;gt;China&amp;amp;#39;s economy is slowing&amp;lt;/a&amp;gt; as its leaders attempt to head off an &amp;lt;a href=&amp;quot;https://www.thebalance.com/asset-bubble-causes-examples-and-how-to-protect-yourself-3305908&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;9&amp;quot;&amp;gt;asset bubble&amp;lt;/a&amp;gt; through reform. For more, see &amp;lt;a href=&amp;quot;https://www.thebalance.com/yuan-reserve-currency-to-global-currency-3970465&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;10&amp;quot;&amp;gt;Could the Yuan Replace the Dollar as the World&amp;amp;#39;s Reserve Currency?&amp;lt;/a&amp;gt;&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;Second, it&amp;amp;#39;s important to understand how a\u00A0country&amp;amp;#39;s economy is measured by its &amp;lt;a href=&amp;quot;https://www.thebalance.com/what-is-gdp-definition-of-gross-domestic-product-3306038&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;11&amp;quot;&amp;gt;Gross Domestic Product&amp;lt;/a&amp;gt;\u00A0(GDP). That has four components:\u00A0output by households, government, and\u00A0&amp;lt;a data-inlink=&amp;quot;KpwdgImbXkl5sBumTWIW8A&amp;amp;#61;&amp;amp;#61;&amp;quot; href=&amp;quot;https://www.thebalance.com/what-is-a-small-business-investment-company-sbic-398465&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;12&amp;quot;&amp;gt;business investment&amp;lt;/a&amp;gt;, as well as\u00A0net exports (exports minus imports). To find out more, see &amp;lt;a href=&amp;quot;https://www.thebalance.com/components-of-gdp-explanation-formula-and-chart-3306015&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;13&amp;quot;&amp;gt;Components of GDP&amp;lt;/a&amp;gt;.\u00A0&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;The output measured by GDP equals spending, so it takes into account the &amp;lt;a href=&amp;quot;https://www.thebalance.com/cost-of-living-define-calculate-compare-rank-3305737&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;14&amp;quot;&amp;gt;cost of living&amp;lt;/a&amp;gt;. That means it doesn&amp;amp;#39;t cost as much to buy, say, a Big Mac in China as in the United States. Analysts use &amp;lt;a href=&amp;quot;https://www.thebalance.com/purchasing-power-parity-3305953&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;15&amp;quot;&amp;gt;purchasing power parity&amp;lt;/a&amp;gt; to take into account each country&amp;amp;#39;s standard of living. You can&amp;amp;#39;t compare countries or economies without it.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;Expect to see the three global giants continue to trade places in the #1 spot for years to come. For more, see\u00A0&amp;lt;a href=&amp;quot;https://www.thebalance.com/the-power-of-the-u-s-economy-3306226&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;16&amp;quot;&amp;gt;The Power of the &amp;lt;/a&amp;gt;&amp;lt;a href=&amp;quot;https://www.thebalance.com/the-power-of-the-u-s-economy-3306226&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;17&amp;quot;&amp;gt;U.S. Economy&amp;lt;/a&amp;gt;.&amp;lt;/p&amp;gt;&amp;lt;h3&amp;gt;How the Recession Affected the Global Ranking&amp;lt;/h3&amp;gt;&amp;lt;p&amp;gt;The EU achieved its top status in 2007. That year, its\u00A0&amp;lt;a href=&amp;quot;https://www.thebalance.com/what-is-gdp-definition-of-gross-domestic-product-3306038&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;18&amp;quot;&amp;gt;Gross Domestic Product&amp;lt;/a&amp;gt;\u00A0(GDP) was $14.4 trillion, while\u00A0&amp;lt;a href=&amp;quot;https://www.thebalance.com/u-s-gdp-5-latest-statistics-and-how-to-use-them-3306041&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;19&amp;quot;&amp;gt;U.S. GDP&amp;lt;/a&amp;gt;\u00A0was only $13.86 trillion. The EU\u00A0held onto its premier position through\u00A0the\u00A0&amp;lt;a href=&amp;quot;https://www.thebalance.com/2008-financial-crisis-3305679&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;20&amp;quot;&amp;gt;2008 financial crisis&amp;lt;/a&amp;gt;\u00A0and the\u00A0&amp;lt;a href=&amp;quot;https://www.thebalance.com/eurozone-debt-crisis-causes-cures-and-consequences-3305524&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;21&amp;quot;&amp;gt;eurozone debt crisis&amp;lt;/a&amp;gt;\u00A0until 2013, when the United States briefly regained the top spot.\u00A0(Source: CIA World Factbook,\u00A0&amp;lt;a href=&amp;quot;https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;externalLink&amp;quot; data-ordinal=&amp;quot;22&amp;quot;&amp;gt;Rank Order GDP&amp;lt;/a&amp;gt;)&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;While the EU and U.S. economies maintained their share of the global economic output, China was the big winner. It now produces twice as much as\u00A0in 2007, when its GDP was $7 trillion. India is also a big winner. Its GDP also nearly tripled from its 2007 output of $2.965 trillion. Japan barely gained any ground Its GDP was $4 trillion in 2007. Germany&amp;amp;#39;s GDP only rose 16% from its $2.8 trillion output in 2007.\u00A0&amp;lt;/p&amp;gt;&amp;lt;h3&amp;gt;Should the EU Ever Be Considered the World&amp;amp;#39;s Largest Economy?&amp;lt;/h3&amp;gt;&amp;lt;p&amp;gt;Even when the EU produced more, some experts said the United States was still the world&amp;amp;#39;s largest economy. They argued that America is a country while the EU is just a trading area that includes 27 separate countries. However, the EU confers many rights that make it more than just a free trade zone (such as &amp;lt;a href=&amp;quot;https://www.thebalance.com/facts-about-nafta-statistics-and-accomplishments-3306280&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;23&amp;quot;&amp;gt;NAFTA&amp;lt;/a&amp;gt;). In addition to &amp;lt;a href=&amp;quot;https://www.thebalance.com/tariff-pros-cons-and-examples-3305967&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;24&amp;quot;&amp;gt;tariff&amp;lt;/a&amp;gt; relief, the EU allows free movement between the countries for employment and trade. Furthermore, 13 of these countries share a common currency, the euro. Despite the &amp;lt;a href=&amp;quot;https://www.thebalance.com/eurozone-debt-crisis-causes-cures-and-consequences-3305524&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;25&amp;quot;&amp;gt;eurozone debt crisis&amp;lt;/a&amp;gt;, the EU is lurching toward greater fiscal integration as well as a monetary one. The EU is acting more and more like a unified economy all the time.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;The U.S. economy had been growing more slowly than the EU. The eurozone crisis changed all that. Many analysts initially said that the EU &amp;amp;#34;experiment&amp;amp;#34; was doomed to failure since these vastly different countries could never work together as a unified economy. The ongoing eurozone crisis may yet prove them right. However, until then, the EU experience was so successful that areas such as Southeast Asia and Latin America were considering unifying their economies and considering a unified currency. They are waiting to see how the eurozone crisis resolves before following that model.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;Nevertheless, the EU has achieved an &amp;lt;a href=&amp;quot;https://www.thebalance.com/economies-of-scale-3305926&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;26&amp;quot;&amp;gt;economy of scale&amp;lt;/a&amp;gt; that eats into the &amp;lt;a href=&amp;quot;https://www.thebalance.com/comparative-advantage-3305915&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;27&amp;quot;&amp;gt;comparative advantage&amp;lt;/a&amp;gt; the United States has traditionally enjoyed. Furthermore, the EU&amp;amp;#39;s currency, the &amp;lt;a href=&amp;quot;https://www.thebalance.com/what-is-the-euro-3305928&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;28&amp;quot;&amp;gt;euro&amp;lt;/a&amp;gt;, has successfully competed with the dollar as a &amp;lt;a href=&amp;quot;https://www.thebalance.com/world-currency-3305931&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;29&amp;quot;&amp;gt;global currency&amp;lt;/a&amp;gt;. Thanks to these competitive pressures, and those from China, the United States\u00A0has once again lost its #1 spot as the world&amp;amp;#39;s largest economy.\u00A0&amp;lt;/p&amp;gt;"^^<http://www.w3.org/2001/XMLSchema#string>
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