worldeconomy

The world economy is the global system of economic activity and interdependence among countries. It encompasses the production, distribution, and consumption of goods and services across borders, together with financial flows, labor mobility, and policy interactions that link national economies into a single market.

Its size and structure are commonly measured by world gross domestic product, while trade, investment, and capital flows reflect its connectivity and dynamism. Global value chains, technological change, and comparative advantage drive specialization across regions and firms.

Key institutional actors include the International Monetary Fund, the World Bank, and the World Trade Organization, along with regional development banks and central banks. They set rules, provide financing, and promote policy coordination, macroeconomic stability, and sustainable growth.

Historical development has been shaped by mercantilist and industrial-era policies, the Bretton Woods system, the shift to flexible exchange rates, and rapid globalization since the 1990s. The 2008 financial crisis and the Covid-19 pandemic highlighted the fragility and resilience of global linkages, prompting renewed attention to financial safeguards, supply chain diversification, and policy coordination.

Major challenges include inflation and debt sustainability, income inequality, climate change, and the political risks of protectionism. Emerging technologies, demographic shifts, and sustainable development policies are expected to influence the medium-term trajectory of the world economy, shaping growth, employment, and living standards worldwide.