eli5 – Russia has an economy smaller than Canada or Italy. How does it continue to be a threatening, great power without going bankrupt?
In: 808
Russia has a smaller economy than Canada or Italy measured in US dollars.
Both Canada and Italy regularly trade with the U.S. and as such one can image that the dollar exchange rate represents a valid measure to convert their respective currencies to US dollar as a mathematical exercise.
The trade between the U.S. and Russia is not as free and not as important and as such the exchange rate does not necessarily represent a true conversion of currencies, and rather a consequence of current political situation.
If we were to, let’s say, measure economic activity in terms tonnes of concrete, professional work hours, able bodied men in case of war or kilometres of railways built and maintained Russia would probably be equal to the U.S., and China far surpass the U.S..
All comparisons are heavily dependent on what you measure in, and how you measure, especially for such complicated matters as economies.
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