Five years ago, the world economy seemed to be doing fine.

But it wasn't. The fourth quarter of 2007 was the peak for the U.S. economy. It began a mild recession in early 2008 that turned into a severe one by late in the year, when the credit crisis spread to most of the world. A few countries escaped recession, but virtually none was able to avoid severe bear markets in stocks.

In some countries, including the largest developing economies in Asia, their GDP charts show no indication that bad things ever happened. China's GDP growth slowed a bit, and may be slowing more now, but it never came close to recession.

By the third quarter of 2012 China's gross domestic product, measured in local currency and adjusted for inflation, was 50 percent larger than it had been at the end of 2007. The economies of India and Indonesia had each grown by 30 percent.

At the other end of the spectrum, some major economies are smaller now than they were then, with little indication that they will completely recover any time soon. The Italian and Spanish economies, hurt by their inability to compete with Germany in export markets, continue to decline. Spain's economy is smaller than it was in 2005, while Italy's has fallen below 2003 levels.

Both would be doing better if they were able to devalue their currencies against Germany's, but they cannot because they share the euro.


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Not being in the euro has been critical to the success of some European countries. Poland's economy has grown by about 15 percent, measured in local currency, as the value of the zloty fell sharply in late 2008 and has yet to fully recover against the euro. That has made its exports more competitive.

While some developing economies have showed good growth over the last five years, their stock markets have not done well. In early 2008, China's market broke sharply lower, leading to fears that a world recession might begin there. Nothing like that happened, but the stock market has yet to fully recover.

The U.S. has perhaps the best combined record of major developed economies. Its GDP is 2.5 percent larger than it was at the end of 2007 -- a smaller gain than was shown in Australia, Canada or Germany -- but its stock market is closer to recovering all the lost ground than the markets in any of those countries.

MSCI, a research company that compiles stock indexes based on all major stocks in each country, reports that its All Country World Index is now 16 percent lower than it was five years ago. World GDP -- counting all 56 countries for which data through the third quarter of 2012 is available -- has fully recovered, largely because of strength in large emerging economies.