Understanding Economic Equilibrium by Thomas J. Cunningham & Mike Shaw

Author:Thomas J. Cunningham & Mike Shaw [Thomas J. Cunningham]
Language: eng
Format: epub
Publisher: Business Expert Press
Published: 2021-05-10T16:00:00+00:00

Services as Exports

High net worth people around the world with health issues come to name brand hospitals in the U.S. for treatment. The United States has also been a major exporter of education. A degree from a top U.S. university is held in high esteem internationally.

Health care, education, and the like are intangible exports. We have benefited dramatically from investing and innovating in these areas, and can continue to do so. There has been some hesitation to consider—and difficulty in measuring—such intangible services as exports, but their value to the U.S. economy is enormous. The out-of-country tuitions foreign students pay to U.S. universities and graduate schools make up a notable portion of our export economy and a substantial credit to the balance of trade, not to mention the universities’ cash flows. Tourism is also contributing an increasing share of the overall portion of the balance of trade provided by high value-added exported services. And the economic benefits are spread throughout the country—at least they were pre-COVID-19.

Exported services won’t turn around the trade deficit in the short term, but they will increasingly make their impact long term. COVID slowed that trend but did not make it any less important to pay attention to service exports. It’s easier to calculate the merchandise side of our exports, how U.S.-branded goods sell abroad. But it’s also easy to recognize the value of U.S. service exports. Just look around the world to count the number of highly placed public and private sector officials and office holders with U.S. degrees.

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