Briefing Research paper

Introduction: A Changing World Economy

The relationship of the United States to the world economy is shaped by its size, its

wealth, and its role as a military super power. It is endowed with a wide range of

resources, including abundant and fertile farmland, a relatively well educated

population, and a disproportionate share of the world’s top research universities,

Nobel Prize winners, and venture capital. It is the third most populous country after

China and India, and has either the largest economy in the world, or the second

largest after China, depending on how it is measured.

Throughout most of the post-World War II era, the United States used its size,

wealth, and military power to foster a set of international economic relations that

encouraged a multilateral approach to international trade and finance and economic

support for low- and middle-income countries. It provided technical and military

assistance and engaged in direct military intervention when it was deemed

necessary. With the collapse of the Berlin Wall in 1989 and the dissolution of the

Soviet Union in 1991, the bipolar world of two superpowers and two economic

systems suddenly disappeared. Simultaneously, the global economic landscape was

undergoing profound changes from the successes of middle-income emerging

markets and the shift toward more open trade policies around the world. The

transition to capitalism of formerly socialist economies; the worldwide preference

for more open trade relations; and the economic success of countries from Botswana

in Africa, to Chile in Latin America, to China in Asia are reshaping the world

economy and the role of the United States.N ot

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