Developing economies – 57% of world GDP but lag behind on GDP per Capita

Mark's avatarECONFIX

The growth and stability concerns about China and emerging economies have been well documented in the media of late. So why have these economies grabbed the attention?

According to the IMF emerging and developing economies (E&DE) have grown at more than twice the pace of advanced economies since 2000. The chart below shows that E&DE overtook Advanced Economies in terms of total output in 2008, and at the end of 2014 accounted for about 57% of global output. Advanced economies were the remaining 43%. Back in 1997, when Asia had its currency crisis, E&DE accounted for a lesser 42% of global output.

Devel Econ share of global econ

However concerns in E&D economies have been observed and they include:

1. Their economies have more government intervention and are less driven by the market

Although market forces don’t always result in good outcomes – GFC being a prime example – history suggests that markets are better at…

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