[Joseph_E._Stiglitz,_Carl_E._Walsh]_Economics(Bookos.org) (1)

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HIGH-TECH EXPORTS AND IMPORTS
The United States has emerged as the international leader in
many aspects of the new information and computer technologies.
Silicon Valley in northern California, home to such firms
as Intel, Apple, Sun Microsystems, and Google, has become
synonymous with the information-based economy. We thus
might naturally expect the United States to be a major exporter
of computer-related products. The figure shows the
amount, in millions of dollars, of computer-related products
exported from and imported to the United States in 2003. It
is not surprising that the U.S. is a net importer (i.e., imports
exceed exports) of audio and video equipment. Asian companies
such as Sony have long dominated this market. But the
United States also imports more computer equipment than
it exports.
The figure illustrates two important aspects of trade. First,
for many categories of products, the United States is both an
exporter and an importer. For example, the United States produces
cars for export, and it imports cars from Asia and Europe.
The United States produces semiconductors for export as
well as importing semiconductors.
Second, trade reflects both microeconomic and macroeconomic
factors. That the United States leads the world in
computing technologies does not necessarily imply that it will
be a net exporter of computers. We learned in this chapter
that the overall balance between exports and imports reflects
the balance between a country’s national saving and investment.
If national saving is less than investment, borrowing
from foreigners must finance the difference. The basic trade
identity tells us that when the United States is a net borrower
from foreigners, it also must have a trade deficit: imports will
exceed exports. The overall U.S. trade deficit grew from $163.1
billion in 1998 to $496.3 billion in 2003. Mirroring this deterioration
of the overall trade balance, U.S. imports of computers
rose from $7.3 billion in 1998 to $19.7 billion in 2003, as net
exports of computers went from a surplus of $1.8 billion in
1998 to a deficit of $11.7 billion in 2003.
Many foreign-made computers are powered by American-made computer
chips, such as those being manufactured here.
576 ∂ CHAPTER 26 THE OPEN ECONOMY AT FULL EMPLOYMENT