The World Economy Shifts Eastward

William Easterly points us to a provocative new paper by Danny Quah on how the center of the world economy is shifting eastward.

 Professor Quah,an economist at the London School of Economics, has calculated “theaverage location of economic activity across geographies on Earth”through the last few decades, and found that it has been moving furthereast:

[I]n 1980 the global economy’s centre of gravity wasmid-Atlantic. By 2008, from the continuing rise of China and the rest ofEast Asia, that centre of gravity had drifted to a location east ofHelsinki and Bucharest. Extrapolating growth in almost 700 locationsacross Earth, this article projects the world’s economic centre ofgravity to locate by 2050 literally between India and China. Observedfrom Earth’s surface, that economic centre of gravity will shift fromits 1980 location 9,300 km or 1.5 times the radius of the planet.

Here’s an animated look at this economic migration:

Blackdots represent the world’s actual economic center of gravity, shownevery three years from 1980 to 2007. Red dots represent projections forevery three years thereafter until 2049.

Professor Easterly, an iconoclastic development economist at New YorkUniversity, argues that Westerners should not “get hysterical” (as heassumes they will) in response to this map.

After all, he says, growth is not a zero-sum game. Rather, theenrichment of our trading partners means that there are more customersto buy American products. China and India may be claiming a larger share of economic activity, but that doesn’t mean the raw amount of economic activity in the United States will fall as a result. The overall pie just gets bigger.

That may be true. But to the extent that economic dominancecorresponds to greater political power as well, there may be more forAmericans to worry about as the “economic center of gravity” shiftscloser to China.