Is the world economy dependent on the American economy?

[EternalWingsofGod]

Is the world economy dependent on the American economy?

To an extent, some countries are more influenced than others by the US depending on who their biggest trade partners are.
If they barely trade with them no one really cares unless it influences a partner who trades with them signifcantly as well which is the ripple effect.
In general terms yes but the extent varies if your DPRK who gives a damn you care about China

[1714945922]

1714945922

[equator]

like what one of the user told, world economy means lot of things , if you take fianancial part then most of the country are dependent on american economy. but some country are well equiped by their own resources so they dont need any others help but they are reformed by their own wealth, but the major part of financial process of all country are going through dollars which is why they are depending on american economy.

[Yakamoto]

Is the world economy dependent on the American economy?

Yes. This really shouldn't be a question.

When a country has the world reserve currency, the rest of the world kind of really becomes dependent on that country. When the currency of choice is used to trade 90% of goods between countries, it becomes very important to see that country succeed.

As it stands, the world is incredibly dependent on the US economy, and it will not change until a country like China takes over the world currency position, which would throw the US into serious turmoil, e.g. Britain once the Pound was replaced as the world reserve currency.

[oblomov]

The dollar was removed from the gold standard because the world had so much faith in the dollar, it did not even need to have a gold standard.

People started trusting to dollar and subsequently started depending on the American economy.

No, the USD was removed from the gold standard because the Vietnam War had weakened the fiscal position of the US.

De Gaulle asked the US to make good on its debts in gold, and Nixon closed the gold window at the Fed, effectively repudiating the debt.

Nixon's closing of the gold window contributed to the general "Twilight of Authority" (sociologist Robert Nisbet's phrase), and precipitated the high inflation of the 1970s. 

[deisik]

Is the world economy dependent on the American economy?

Yes. This really shouldn't be a question.

When a country has the world reserve currency, the rest of the world kind of really becomes dependent on that country. When the currency of choice is used to trade 90% of goods between countries, it becomes very important to see that country succeed

It cuts both ways. The reserve status of the US dollar leads to a conflict of "interests", since there is a fundamental antagonism between the US national and global interests, where the former is sought to pursue a current account surplus (to maintain confidence in the US dollar), while the latter requires a current account deficit (to maintain the US dollar as a global reserve currency). Long term, this system is unsustainable (due to imbalances piling up), and everything should eventually go topsy-turvy...

This is known as Triffin's Paradox

[deisik]

The dollar was removed from the gold standard because the world had so much faith in the dollar, it did not even need to have a gold standard.

People started trusting to dollar and subsequently started depending on the American economy.

No, the USD was removed from the gold standard because the Vietnam War had weakened the fiscal position of the US

The war in Vietnam may have exacerbated the situation to a degree, but it surely was not the primary cause for the abandonment of the US dollar-to-gold ratio. In fact, the matters started getting worse for the Dollar right after it had been established as the global reserve currency in 1944 according to the Bretton Woods agreement. The reserve currency status allowed the US to run large trade deficits that were "covered" by issuing yet more dollars. The central banks as well as private investors that accumulated excessive amounts of paper dollars began converting them into gold. In order to somewhat alleviate the pain in the ass, the US and several European countries set up the so-called London Gold Pool in 1961 (that is a few years before things got serious in Vietnam), which primary objective had been to maintain the Bretton Woods system of fixed dollar-to-gold ratio by manipulating the London gold market. Obviously, this could only postpone the inevitable collapse of this system...

Long story short, the US had been abusing the system it established right from the start (until they could no longer profiteer from it)

[roadbits]

Is the world economy dependent on the American economy?

Yes. This really shouldn't be a question.

When a country has the world reserve currency, the rest of the world kind of really becomes dependent on that country. When the currency of choice is used to trade 90% of goods between countries, it becomes very important to see that country succeed.

As it stands, the world is incredibly dependent on the US economy, and it will not change until a country like China takes over the world currency position, which would throw the US into serious turmoil, e.g. Britain once the Pound was replaced as the world reserve currency.

The whole world is not totally depending on US economy but until now lot of new products are invented from USA so they will patent their new technology and who ever buys it must pay the fee for it so indirectly many countries are depended on USA. If slowly new inventions comes from other part of the world than there hold will slowly reduce and currently it is already happening. So or later no one will be depending on USA economy.

[AndySt]

If we talk globally then Yes. The United States is still the world's largest economy although the share is gradually declining. The use of the dollar as the world reserve currency ties the world's financial system to American system. Therefore, the malaise of the American economy affects the world economy and the problems in the world economy in the end will affect the American economy.

[Hazir]

As much I many people don't want to admit US economy is still leading factor on some markets, mainly oil markets are being controlled exclusively by dollar.
Also some countries are not using their own currency to trade with each other but instead are using US Dollars as a medium.

[Yakamoto]

Is the world economy dependent on the American economy?

Yes. This really shouldn't be a question.

When a country has the world reserve currency, the rest of the world kind of really becomes dependent on that country. When the currency of choice is used to trade 90% of goods between countries, it becomes very important to see that country succeed.

As it stands, the world is incredibly dependent on the US economy, and it will not change until a country like China takes over the world currency position, which would throw the US into serious turmoil, e.g. Britain once the Pound was replaced as the world reserve currency.

The whole world is not totally depending on US economy but until now lot of new products are invented from USA so they will patent their new technology and who ever buys it must pay the fee for it so indirectly many countries are depended on USA. If slowly new inventions comes from other part of the world than there hold will slowly reduce and currently it is already happening. So or later no one will be depending on USA economy.

Well they aren't -technically- dependent on the US economy, as many countries could hypothetically function without the USD serving as a medium for trade. It's just the as the world economy currently functions, each economy is fairly dependent on the USD to retain its value. Now even if the US was to tank, the only difference would be the USD being valued considerably lower, but it would not necessarily make any other huge issues as long as it remains the world reserve currency. The real issue comes from every other sort of security that exists, such as bonds or stocks.

Is the world economy dependent on the American economy?

Yes. This really shouldn't be a question.

When a country has the world reserve currency, the rest of the world kind of really becomes dependent on that country. When the currency of choice is used to trade 90% of goods between countries, it becomes very important to see that country succeed

It cuts both ways. The reserve status of the US dollar leads to a conflict of "interests", since there is a fundamental antagonism between the US national and global interests, where the former is sought to pursue a current account surplus (to maintain confidence in the US dollar), while the latter requires a current account deficit (to maintain the US dollar as a global reserve currency). Long term, this system is unsustainable (due to imbalances piling up), and everything should eventually go topsy-turvy...

This is known as Triffin's Paradox

Ah, the joy of economics.

[AndySt]

As much I many people don't want to admit US economy is still leading factor on some markets, mainly oil markets are being controlled exclusively by dollar.
Also some countries are not using their own currency to trade with each other but instead are using US Dollars as a medium.

You probably will be surprised but there are countries that do not have their own currencies, but these countries don't use American dollar for example Andorra

[MTBTT]

Is the world economy dependent on the American economy?

No. Right now it's China that's controlling it.

[deisik]

As much I many people don't want to admit US economy is still leading factor on some markets, mainly oil markets are being controlled exclusively by dollar.
Also some countries are not using their own currency to trade with each other but instead are using US Dollars as a medium.

You probably will be surprised but there are countries that do not have their own currencies, but these countries don't use American dollar for example Andorra

There are a few countries that are using the US dollar exclusively. For example, Ecuador and Panama. In both these countries the dollar is officially used as a legal tender, i.e. taxes and duties can be paid with it

[Betwrong]

Is the world economy dependent on the American economy?

Yes it is. But let's not forget that the world economy is dependent on other big countries' economies too.

Personally I don't understand why some people talking about the USD as something special, as something you can just print and then buy anything in the world with. Can't you print say pounds or euros or almost any other world currency exchange it with dollars and then buy anything?

Maybe I'm missing something, so I'd like to see the explanation why am I wrong.

[turkandjaydee]

very much so, but not just US, if China fail, we would also fail.

[ThunderThomas]

For bitcoin I think so, that was the first place where bitcoin I have heard of. But for normal economy I don't think we are dependent with America they are still Europe and England and other country's. Well the economy have been always going down and up so yeah.

[Altynbekova]

Hmm I am not sure about the economy about if the dollar goes down. If that happen I think the EU county will just help America to go up again. But I think that some is dependent with American economy, but all because is just one country what you are talking about the world have also there money so yeah.

[molsewid]

very much so, but not just US, if China fail, we would also fail.

Yes. The influence from China is getting bigger day after day. It is the largest users of commodities. The price of commodities dropped a lot due to slowdown in China.

[Rizky Aditya]

I think a large part of the economy relies on the American economy. But I don't think the whole economy depends on it.

[extrabyte]

Not only the american economy but i think that chinese economy has impact in the world economy as they export a lot for the rest of the world.