The
world economy or the
global economy is the
economy of all humans of the world, referring to the global
economic system which includes all economic activities which are conducted both within and between
nations, including
production,
consumption,
economic management,
exchange of financial values and
trade of
goods and services.
[1][2] In some contexts, the two terms are distinct "international" or "global economy" being measured separately and distinguished from national economies while the "world economy" is simply an aggregate of the separate countries' measurements. Beyond the minimum standard concerning value in production, use and exchange, the definitions, representations, models and valuations of the world economy vary widely. It is inseparable from the geography and
ecology of planet
Earth.
It is common to limit questions of the world economy exclusively to
human economic activity and the world economy is typically judged in monetary terms, even in cases in which there is no efficient
market to help valuate certain goods or services, or in cases in which a lack of independent research, genuine data or government cooperation makes establishing figures difficult. Typical examples are
illegal drugs and other
black market goods, which by any standard are a part of the world economy, but for which there is by definition no legal market of any kind.
However, even in cases in which there is a clear and efficient market to establish a
monetary value, economists do not typically use the current or official
exchange rate to translate the monetary units of this market into a single unit for the world economy since exchange rates typically do not closely reflect
worldwide value, for example in cases where the volume or price of transactions is closely regulated by the government.