DEFINITION of 'First World'

1. A country that was aligned with the West and opposed to the Soviet Union during the Cold War. Since the collapse of the Soviet Union in 1991, this use of First World has largely gone away.

2. A country characterized by political stability, democracy, rule of law, a capitalist economy, economic stability and a high standard of living. Various definitions have been used for First World nations, including GDP, GNP and literacy rates. The Human Development Index is also a good indicator in determining First World countries.


First-world countries have stable currencies and robust financial markets, making them attractive to investors from all over the world. Examples of first-world countries include the United States, Canada, Australia, New Zealand, Japan and the Western European countries. First-world countries are in the minority; most countries are classified as second- or third-world.

  1. Tariff War

    An economic battle between two countries in which Country A raises ...
  2. Currency Union

    A currency union is where more than one country or area shares ...
  3. Administered Price

    An administered price is the price of a good or service as dictated ...
  4. U.S. Agency for International Development ...

    The U.S. Agency for International Development is an independent ...
  5. Gross National Product - GNP

    Gross national product (GNP) is an economic statistic that includes ...
  6. Terms of Trade - TOT

    Terms of trade (TOT) are the ratio between a country's export ...
Related Articles
  1. Insights

    Why the USSR Collapsed Economically

    While initially experiencing rapid economic growth, the Soviet command economy collapsed after it grew more complex.
  2. Trading

    Main Factors that Influence Exchange Rates

    The exchange rate is one of the most important determinants of a country's relative level of economic health and can impact your returns.
  3. Insights

    The World's Fastest Growing (and Shrinking) Economies

    The IMF cut its forecast for 2016 global economic growth Tuesday, estimating that GDP would expand at a rate of 3.2%, rather than the 3.4% forecast in January.
  4. Investing

    Countries With The Lowest Unemployment Rates

    A high U.S. unemployment rate may not be as restrictive as you think. Find out where the jobs really are.
  5. Trading

    The Euro: What Every Forex Trader Needs To Know

    Find out the reports and events that determine the euro's worth, and how we can predict movements in its valuation.
  6. Insights

    The Balance Of Trade

    The balance of trade is the difference between a country’s imports and exports. A trade deficit occurs when a country buys or imports more goods from other countries than it sells or exports. ...
  7. Trading

    Dollarization Explained

    Find out how fledgling economies can find some stability in their currency and attract foreign investment.
  8. Tech

    The Worst Performing Currencies Of 2015

    The U.S. dollar has strengthened over the past year while weakness in Europe and the former Soviet Union has led to declines in those currencies.
  1. How did the Soviet economic system affect consumer goods?

    Discover how the now-defunct Soviet economic system affected domestic consumer goods markets. Communist ideology dictated ... Read Answer >>
  2. What economic indicators are most used when forecasting an exchange rate?

    Discover what economic indicators are most widely used to forecast a country’s exchange rate and how various factors influence ... Read Answer >>
  3. What does it mean when a country has little activity in its capital account?

    Know what a country's capital account represents and understand what the implications are if a country has little activity ... Read Answer >>
  4. Which countries are most productive in terms of GDP?

    Countries around the world constantly compete with one another to be the most innovative and productive. Read to see which ... Read Answer >>
  5. How do changes in national interest rates affect a currency's value and exchange ...

    Generally, higher interest rates increase the value of a given country's currency, but Interest rates alone do not determine ... Read Answer >>
  6. Is it possible for a country to have a comparative advantage in everything?

    Learn whether one country can have a comparative advantage in everything and what the difference between comparative advantage ... Read Answer >>
Hot Definitions
  1. Federal Funds Rate

    The federal funds rate is the interest rate at which a depository institution lends funds maintained at the Federal Reserve ...
  2. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  3. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  4. Entrepreneur

    An entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture.
  5. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  6. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
Trading Center