E C O N O M I C R E P O R T O F T H E P R E S I D E N T

The Benefits of a Global EconomyThe United States approaches globalization from a position of considerablestrength. In per capita terms, the United States has been the world’s richestmajor economy since overtaking the United Kingdom early in the 20thcentury, and by most measures it remains so today.Chart 6-6 shows estimates of GDP per capita since 1900. The chart isplotted on a ratio scale, so that a steeper slope implies a faster growth rate. Asthe figure illustrates, the dominant macroeconomic fact for both the UnitedStates and other major economies for more than a century has been that outputper person has grown. But this growth has been far from steady. The1913-50 period, when global economic relations deteriorated and integrationreceded amid active protectionism and instability in the internationalmonetary system, recorded the most volatile output growth rates in all fourcountries shown in the chart. The post-World War II period of rising globalization,in contrast, has been a time of rapidly rising prosperity.Throughout much of the postwar period, Germany and Japan grew morequickly than the United States, somewhat closing the gap in GDP per capita.But this convergence slowed after the early 1970s and had largely ceasedby the end of the 1980s. In 1998, GDP per capita remained considerablyhigher in the United States than in the other economies in Chart 6-6. Overall,the record shows that the U.S. economy has thrived in the global mar-Chapter 6 | 213