Advanced Economies

The International Monetary Fund in Washington, DC likes to categorize countries as those having advanced economies, vs. “in transition” and “developing” (not a good sign). Those with advanced economies include the U.S., Canada, Australia, Israel, Hong Kong, Japan, South Korea, and most countries in Europe.

One of the main indicators of an advanced economy is the size of the middle class. This tends to indicate that all the wealth is not just in the hands of a few with many living in poverty. Other indicators include a high gross domestic product per person, or if the country is significantly industrialized. Advanced economies have a great influence on developing countries and those in transition. For example, if a recession occurs in an advanced economy country, its effects will be felt elsewhere in regard to trade and employment.