The continuing resilience of the US economy is one of the great mysteries of international economics. The United States has consistently run a current account deficit for decades, averaging 2.9 percent of GDP over the period 1985‒2015 (World Bank, 2016). For any ordinary country this would be a sign of impending economic catastrophe. Compounding the mystery is the fact that the United States has an enormously negative level of net international investment: foreigners hold several trillion dollars more in US assets than US entities hold in assets abroad (Curcuru et al., 2013, p. 2). Alarmist headlines about massive trade deficits and the selling off of America are, strictly speaking, correct. Yet the US continues to have by far the highest GDP per capita of any large economy, the US economy continues to grow at a steady rate, and there are no indications that investors expect an imminent collapse of the US economy (Babones, 2017b). The yield on 30-year US government bonds, a standard indicator of long-term risk expectations, has been on a steady downward trend for the last 30 years (FRED, 2017).

The seemingly dire structural deficits that characterize the US economy are balanced by a series of economic rents that can be characterized as a modern form of tribute. Many of these rents are directly related to the central status of the US dollar in the world's financial system. In a major review of the literatures on dollar rents, McCauley (2015) summarizes them as deriving from (1) the fact that the US borrows in its own currency, (2) foreign holdings of physical US currency, (3) the use of the dollar as a reserve currency, (4) the excess returns earned by US investments abroad compared to foreign investments in the US, and (5) advantages enjoyed by US banks in global finance.

McCauley acknowledges the existence of all of these rents but is skeptical about their aggregate value. What he may be missing – and what no straightforward econometric analysis can measure – are the positive externalities generated by putting all of these advantages together. Externalities are spillover effects generated by actions that are taken for some other purpose. They are a form of unintended consequence.