Alan Greenspan: U.S. Economy, Education and Training to Compete in Global Markets (2005)

The world economy or global economy is the economy of the world, considered as an international exchange of goods and services.[4] In some contexts, the two terms are distinguished: the "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 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 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. World share of GDP (PPP) (World Bank, 2011).[5] Rather, market valuations in a local currency are typically translated to a single monetary unit using the idea of purchasing power. This is the method used below, which is used for estimating worldwide economic activity in terms of real US dollars or euros. However, the world economy can be evaluated and expressed in many more ways. It is unclear, for example, how many of the world's 7.13 billion people have most of their economic activity reflected in these valuations. In 2015, the largest economies in the world with more than $2 trillion, €1.25 trillion by nominal GDP were the United States, China, Japan, Germany, France, the United Kingdom and India. http://en.wikipedia.org/wiki/World_economy Microeconomics (from Greek prefix mikro- meaning "small" and economics) is a branch of economics that studies the behavior of individuals and small impacting organizations in making decisions on the allocation of limited resources (see scarcity). Macroeconomics (from the Greek prefix makro- meaning "large" and economics), on the other hand, is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets. The modern field of microeconomics arose as an effort of neoclassical economics school of thought to put economic ideas into mathematical mode. It began in the 19th century debates surrounding the works of Antoine Augustine Cournot, William Stanley Jevons, Carl Menger, Léon Walras, this period is usually denominated as the Marginal Revolution . A recurring theme of these debates was the contrast between the Labor theory of value and the Subjective theory of value, the former being associated with classical economists such as Adam Smith, David Ricardo and Karl Marx (Marx was a contemporary of the marginalists). Alfred Marshall in his Principles of Economics (1890),[7] presented a possible solution to this problem, using the supply and demand model. Marshall's idea of solving the controversy was that the demand curve could be derived by aggregating individual consumer demand curves, which were themselves based on the consumer problem of maximizing utility. The supply curve could be derived by superimposing a representative firm supply curves for the factors of production and then market equilibrium would be given by the intersection of demand and supply curves. He also introduced the notion of different market periods: mainly short run and long run. This set of ideas gave way to what economists call perfect competition, now found in the standard microeconomics texts, even though Marshall himself has highly skeptical it could be used as general model of all markets. http://en.wikipedia.org/wiki/Market_(economics)