Blog Post

AEIdeas

The table and first map above help to put America’s ridiculously large $18.6 trillion economy (Gross Domestic Product in 2016) into perspective by comparing America’s 20 largest metro economies in 2016 (based on data released yesterday by the Bureau of Economic Analysis) to the economies of entire countries with similar Gross Domestic Products in 2016 (International Monetary Fund data here via Wikipedia). Here are some interesting facts about the size of US metro area economies:

America’s largest metro economy – the New York area — produced 8.4% more economic output last year ($1.65 trillion of GDP) than the entire country of Canada ($1.52 trillion of GDP) and the New York metro area as a separate country would have been the 10th largest economy in the world behind No. 9 Brazil in 2016 ($1.8 trillion GDP). The LA area, the second largest US metro economy, produced just slightly less economic output ($1.0 trillion of GDP) in 2016 than the entire country of Mexico ($1.05 trillion of GDP) and LA would have been the 16th largest economy in the world last year as a separate country behind No. 15 Mexico. Chicago’s economy is America’s third largest metro economy and in 2016 (GDP of $651 billion) was almost the same size as Switzerland’s (GDP of $646 billion) and it would have been the 20th largest national economy in the world last year. The top seven largest US metro areas last year produced $5.2 trillion of economic output (GDP) last year, and those metro areas (NY, LA, Chicago, Dallas, DC, Houston and San Francisco) combined as a separate country would have been the third largest national economy in the world, ahead of No. 4 Japan’s $4.9 trillion GDP in 2016. It’s also interesting to note that roughly half of America’s GDP last year ($9.3 trillion) was produced in the country’s 22 largest metro areas: the 20 metros in the table above, plus St. Louis and Charlotte (see second map above).

MP: This comparison provides another demonstration of how ridiculously large America’s $18.6 trillion economy really is by showing that the economies of America’s largest metropolitan areas are equivalent in economic size to the GDP of entire large countries (see my recent comparison on CD of the economic size of US states to entire countries with comparable GDP). It’s mind-boggling to think that the economy of the New York City metro area is larger than Canada’s economy, and the economy of the LA area is almost as large as the entire Mexican economy. Moreover, America’s 18 largest metro economies as separate nations would all rank in the world’s 50 largest economies and all 20 US metro areas in the table above would rank in the world’s 55 largest economies. Perhaps it’s a demonstration of Larry Kudlow’s claim that “free market capitalism is the best path to prosperity” because it was largely free markets, free trade, and capitalism that propelled the US from a minor British colony in the 1700s into a global economic superpower and the world’s largest economy, with dozens of metro areas now that produce economic output equivalent to the GDP of some of the world’s largest countries.

Special thanks to AEI’s Olivier Ballou for help with the maps above.