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Posts tagged with: "ITMTAEM133S"

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The education trade balance

Our last post discussed the foreign travel trade balance—that is, money spent by foreigners for tourism, business, and education in the U.S. compared with what Americans spend abroad. In this post, we focus on travel for education. The Bureau of Economic Analysis began including travel-for-education data only recently, when they made their last big revision to GDP data. In fact, the BEA has recomputed these data for the past several years, so we can compare the old and new series to get a sense of the education trade balance. (This is a much more convenient process than adding up all the expenses of foreign students, so thanks BEA!)

The FRED graph above makes it quite apparent that foreign students spend much more in the U.S. (3.5 times more) than American students spend abroad. In fact, the surplus for the last month of available data, $3.3 billion in September 2017, is about 7% of the overall trade deficit at the time and 12% of the trade deficit with China. Obviously, this surplus is quite substantial—with the bonus of having top international students study in the U.S., and possibly remain as part of the U.S. economy, after having their education paid by funds from abroad.

How this graph was created: Search for “travel trade,” select the exports series that includes education travel, and click “Add to Graph.” From the “Edit Graph” panel, add the export series that removes education travel and apply formula a-b. Repeat for the imports series.

Suggested by Christian Zimmermann.

View on FRED, series used in this post: BOMTVLM133S, BOXTVLM133S, ITMTAEM133S, ITXTAEM133S

The foreign travel trade balance

The U.S. plays host to many visitors from abroad—for tourism, business, and education. Many Americans travel abroad for the same reasons. How much is spent on this type of travel? FRED’s best option for answering this question is the national income and product accounts (NIPA), which has exports and imports series dedicated to travel. The graph above includes all local expenses related to travel (food, lodging, entertainment, tuition, and business expenses) except the cost of the overseas flight.

The graph shows that the U.S. is a net exporter of travel services, particularly since the most recent recession. Over the past few years, though, the gap seems to be shrinking. Because the graph above uses nominal terms, we repeat it in real terms below using specific deflators for exports and imports of services. The new trend is confirmed and, in fact, appears even stronger.

How these graphs were created: For the first graph, search for “trade travel” and you should get four results. Select the ones including education, as they have more-recent data points, and click “Add to Graph.” For the second graph, use the first and go to the “Edit Graph” panel: Add a series by searching for “export deflator.” Select the quarterly series pertaining to only services. Then apply formula a/b*100. Repeat for the imports.

Suggested by Christian Zimmermann.

View on FRED, series used in this post: A646RD3Q086SBEA, A656RD3Q086SBEA, ITMTAEM133S, ITXTAEM133S

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