AN economic blogger recently made a comparative chart of the global economy that was measured using two benchmarks: nominal gross domestic product (GDP) and market capitalization. The key assertation in that blog is what many of us have known all along: while the United States accounts for just a quarter of global productivity (roughly $26 trillion of GDP), it holds such an immense grip on the flow of global private capital, the equivalent of out-of-bounds, over-the-top enthusiasm for US equities on a global scale. Based on a measurement weighted by market capitalization, the US dominates the rest of the world with more than 65 percent of the total stock market. Japan and the United Kingdom trailed far behind with just over 4 percent and 2 percent, respectively. Let that sink in: the US has almost a 70-percent share of global equities with just a quarter of global productivity.
China, the world's second-biggest economy with an annual GDP of $16 trillion, is hardly a player when the global economy is weighted based on market capitalization.
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