Still on the great Harvard magazine article, which among things, is serving as a great Econ 52 refresher:
Money flowing into the United States injects purchasing power into the economy unevenly—it affects certain sectors, such as housing, more than others. “Assume the world is divided into things that are tradable and things that are not,” says Jeffry Frieden. Hard goods, clothing, and most foods are tradable: they are transported easily across borders and are therefore subject to international competition. Haircuts, housing, medical care, restaurant food, and public transportation, on the other hand, are consumed where they are produced. Because these kinds of goods and services can’t be exported or imported, they are considered non-tradable. When foreigners are buying our currency, the dollar appreciates, making international goods relatively inexpensive. That leaves consumers with even more money to spend on non-tradables, such as housing and land. And because housing and land are not subject to foreign competition, their price goes up.Is it plausible, through a combination of an increasingly global distributed base of high-value knowledge workers, that some of the services (hair cuts, medical care, restaurant food) described as non-tradable become tradable? To borrow from the Greeks, what if the best barber lives in Italy, and technology enables him to cut your hair remotely, let's say with robotic arm? Is that simply far-fetched? Does it matter, in terms of how capital flows, and how we value services?