How Did The Cold War Influence The Economy

The world in the first half of the 19th century was largely dominated by multiple states in different regions around the world. Effectively, the distribution of power between these numerous states in the world initiated and sparked what became to be known as World War I and World War II. Shortly after the Second World War, the allocation of power in countries around the world became smaller and smaller as many states that were originally in the spotlight of the world faded into irrelevance. The result was two power hungry countries coming out of the pack, namely the United States and the Soviet Union. In a world ruled purely by two states, the Cold War allowed other countries in both the Western bloc and Eastern bloc to join each of the two …show more content…
Because a realist emphasizes that power is the primary determinant of who prevails in a conflict and that military power is central, the link between the economy and the military is an important one as one influences the other. Moreover, since money resides in the state of the economy, other factors such a technological growth is also influenced by the …show more content…
The GDP of the US was $18.558 trillion in 2016 which is over 25% of the world’s entire output. In contrast, the entire European Union comprises of only $16.477 trillion, still less than the US total (IMF). Although GDP is not the best measure of economic wellbeing because it does not differentiate between productive and destructive measures, there are other aspects of the world economy the US has control over. For instance, from a book published by the World Bank, “The US has been the largest shareholder and the most influential member country. U.S. support for, pressure on, and criticisms of the Bank have been central to its growth and the evolution of its policies, programs, and practices” (IATP). Furthermore, the US has immense influence over other financial institutions such as the International Monetary Fund. Related to trade, the US was one of the notable countries in developing the World Trade Organization which facilitates trade with 164 other states (WTO). Being one of the more prominent states within the organization, the US is able to have a huge influence on the world by reducing trade barriers and opening new markets. In order to be a worldwide power, trade is a critical aspect for countries to control. It is especially important in the US as trade as a proportion of US GDP increased from 25% in 2009 to 31%