The Real U.S. Role and Position in the World Economy

Rolf Hackmann, Xiang Yi, Anna Valeva


This paper proposes a new method of measuring the position of the United States in the world economy defined
by the GDP standard as before. The central argument is that previous approaches relied solely on measuring
position on the basis of geography. GDP produced on American soil, including its export and import components,
were indiscriminately considered to be "American". More realistically, the measurement of the U.S. economic
power needs to be adjusted for the foreign element in local production, imports and exports. More specifically,
the role of majority-owned foreign direct investment enterprises within the U.S., as well as their U.S. corollaries
abroad, needs to be explored. Thus, the real economic size of a nation can be precisely measured on the basis of
capital control rather than national geography, which now loses any meaningful reference role altogether.
Substituting this new approach also allows for a more realistic, direct assessment of national competitiveness in
the global economy. The step-by-step implementation and consequences are explained in the paper. Ultimately,
national competitiveness is determined by the relative trend developments of the outward versus inward direct
investment forces.

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International Journal of Business and Management   ISSN 1833-3850 (Print)   ISSN 1833-8119 (Online)

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