Arvind Subramanian was mentioned in a Wall Street Journal opinion piece on India, China and the US.
From the Article
Is the era of American economic dominance coming to an end? If so, what does it mean for the big emerging economies, especially China and India?
Buried deep in the statistical data accompanying the International Monetary Fund’s April 2011 World Economic Outlook, there’s a projection that by 2016, China will overtake the United States as the world’s biggest economy when incomes are measured in purchasing power parity terms, a fact noted by WSJ columnist Brett Arends of Marketwatch.
This is most strikingly seen in this chart plotting U.S., Chinese and Indian shares of world output. The U.S. share has been steadily declining and the Chinese share rising and they’re projected to cross in 2016.
The Indian story, while less dramatic, also shows a steadily increasing share of world output. If the trend holds, India will be nipping at America’s heels for the number two spot by mid-century. It’s hard to downplay how momentous this will be. For the first time in almost three centuries, the biggest economy in the world will once again be Asian.
And, taking a broader view, advanced economies will cede the top spot of economic power to developing economies as a group by as early as 2013.
The IMF’s noted that it prefers to compare countries using market and not PPP exchange rates, by which standard the U.S. will stay number one for another decade or so. This doesn’t make good economic sense, as market exchange rates can fluctuate in ways far removed from economic fundamentals, while PPP exchange rates measure a currency’s real buying power and therefore are a better measure of the true size of an economy. Indeed, Arvind Subramanian, an economist at the Peterson Institute, argues, using a different data set, that China has already overtaken the U.S.