how much money is there in the world?
- Written by Renaud Foucart, Senior Lecturer in Economics, Lancaster University Management School, Lancaster University
How much money is there in the world? – Tsubamé, aged ten, London
If we want to add up how much money there is in the world, a good place to start would be counting all the notes and coins out there – in people’s wallets and money boxes and in cash machines.
Let’s start with pounds. There is about £84 billion[1] (or 84,000,000,000) of British money out there in coins and notes. There’s also US$2,236 billion[2] in US money, €1,578 billion[3] in the money of the European Union and ¥9,616 billion[4] in Chinese money – plus money in many other currencies.
As money is not the same in every country, summing up all the coins and notes in the world means that you need to measure how much a US dollar, an Indian rupee, or a Chinese yuan is worth in Great British pounds. If this is done with the latest available data[5], then added up, you will find a total of £6,113 billion.
But there are also a lot of things that have value and are not exchanged. If you own a bag of diamonds and keep it in your bedroom, you are rich. But this is not money. And you are not exchanging it either. So it does not count in any of the numbers I have given you so far.
And sometimes, things that have value cannot easily be turned into money. Imagine that you own a beautiful forest, with a nice clean river to swim in during the summer, and some very rare birds and old trees. And underneath that forest, there is a lot of oil.
By owning this forest, you are very wealthy. Like the diamonds in your bedroom, owning the land and the forest and the oil makes you rich. But once you decide to turn your wealth into a lot of money, you will need to destroy the forest: cut down the trees for wood to sell, and drill into the earth to get the oil out.
People might have enjoyed spending time with friends walking in the forest, or paddling in the rivers. This has value, and it is lost when the forest is gone. And the wealth you held by owning the forest is gone too.
If we want the money we use to still be worth something in the future, we sometimes need to restrain from destroying what we own to get cash today.
References
- ^ £84 billion (stats.bis.org)
- ^ US$2,236 billion (stats.bis.org)
- ^ €1,578 billion (stats.bis.org)
- ^ ¥9,616 billion (stats.bis.org)
- ^ the latest available data (stats.bis.org)
- ^ Curious Kids (theconversation.com)
- ^ The Conversation (theconversation.com)
- ^ curiouskids@theconversation.com (theconversation.com)
- ^ Today, £1 is worth (www.xe.com)
- ^ one dollar and 70 cents (www.xe.com)
- ^ trying to convince others (theconversation.com)
- ^ £2,223 billion (stats.bis.org)
- ^ £79,437 billion (data.worldbank.org)
- ^ Bjoern Wylezich/Shutterstock (www.shutterstock.com)
Read more https://theconversation.com/curious-kids-how-much-money-is-there-in-the-world-220559
