What is the difference between the world economy and world trade? I have read in one book saying "US share in the world economy is 28% and in the world trade is 15%" (2008 edition though). Please explain. Thanks

  • $\begingroup$ Trade is between countries as pointed out in the answer below. An easy way to distinguish between this and world economy is to think of the world economy as the total output produced by all countries. So 28% of the GDP of Earth is attributable to the U.S. $\endgroup$ – Brennan Aug 27 '19 at 21:54

"Trade", in economics, usually means trade between countries. So if goods made in, say, the Netherlands are sold in Belgium, that counts as trade. But if goods made in, say, California are sold in Florida, that doesn't count as trade. Because the US is a large and populous country, it has a high proportion of internal transactions that count as part of its GDP, a measure of its economy, but do not count as trade. Many smaller countries, on the other hand, will have a share of world trade exceeding their share of the world economy.

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    $\begingroup$ Also, the definition of world trade is unclear. The fraction of a country in world trade could be with respect to imports, exports, or their average. $\endgroup$ – ChinG Dec 1 '18 at 22:49
  • $\begingroup$ "Trade" is usually imports + exports. $\endgroup$ – Art Aug 28 '19 at 2:50

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