Economic history of the world

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The economic history of the world encompasses the development of human economic activity throughout time. It has been estimated that throughout prehistory, the world average GDP per capita was about $158 per annum (adjusted to 2013 dollars), and did not rise much until the Industrial Revolution. ^{[citation needed]} Cattle were probably the first object or physical thing specifically used in a way similar enough to the modern definition of money, that is, as a medium for exchange.

By the 3rd millennium BC, Ancient Egypt was home to almost half of the global population.^{[citation needed]} The city states of Sumer developed a trade and market economy based originally on the commodity money of the shekel which was a certain weight measure of barley, while the Babylonians and their city state neighbors later developed the earliest system of prices using a measure of various commodities that was fixed in a legal code. The early law codes from Sumer could be considered the first (written) financial law, and had many attributes still in use in the current price system today. Temples are history's first documented creditors at interest, beginning in Sumer in the third millennium. Later, in their embassy functions, they legitimized profit‑seeking trade, as well as by being a major beneficiary. According to Herodotus, and most modern scholars, the Lydians were the first people to introduce the use of gold and silver coin around 650–600 BC.

The first economist (at least from within opinion generated by the evidence of extant writings) is considered to be Hesiod, by the fact of his having written on the fundamental subject of the scarcity of resources, in Works and Days.

Eventually, Indian subcontinent and China accounted for more than half the size of the world economy for the next 1,500 years. In the Middle Ages, the world economy slowly expanded with the increase of population and trade. During the early period of the Middle Ages, Europe was an economic backwater. However, by the later Medieval period, rich trading cities in Italy emerged, creating the first modern accounting and finance systems.

During the Industrial Revolution, economic growth in the modern sense first occurred during the Industrial Revolution in Britain and then in the rest of Europe due to high amounts of energy conversion. Economic growth spread to all regions of the world during the twentieth century, when world GDP per capita quintupled. The highest growth occurred in the 1960s during post-war reconstruction. In particular, shipping containers revolutionized trade in the second half of the century, by making it cheaper to transport goods, especially internationally. These gains have not been uniform across the globe; there are still many countries where people, especially young children, die from what are now preventable diseases, such as rotavirus and polio.

The Great Recession happened from 2007 to 2009. Since 2020, economies have suffered from the COVID-19 recession.