Services in the Domestic Economy and in World Transactions

A new interest in the role of services in world transactions has been generated by the current efforts of the U. S. Government to reduce barriers to international trade in services.The paper distinguishes four different classifications of economic activities between services and corrmodities. Service industries -- those producing non-storable outputs -- have been growing in nost domestic economies relative to commodity-producing industries, though about half the growth in their share in GDP is attributable to relative price increases.The U.S. policy effort focuses on a somewhat different set of services which are referred to as "private nonfactor services". Exports of such services have not expanded relative to comrrodity exports. However, their sales by U.S. affiliates abroad are much larger than exports from the U.S.and have been growing more rapidly than affiliates' commodity sales. It will not be easy to obtain the consent of foreign countries toa general easingof restrictions on direct foreign investment in service sectors.Also, it may beasked why,if growth is to be the criterion of special negotiating effort, the commodity-service dichotomy is relevant. Why not search for fast qrowing sectors amonq cammodities as well? However, a successful effort to reduce some foreign barriers and the compensatory reductions in U.S. barriers that this would entail might provide a modest counterweight on the side of liberalization in a world in which restrictions are growing.

Pneumonia Due to Mycoplasma in Gnotobiotic Mice I. Pathogenicity of \u3cem\u3eMycoplasma pneumoniae\u3c/em\u3e, \u3cem\u3eMycoplasma salivarium\u3c/em\u3e, and \u3cem\u3eMycoplasma pulmonis\u3c/em\u3e for the Lungs of Conventional and Gnotobiotic Mice

Pneumonia due to mycoplasma in gnotobiotic mice. I. Pathogenicity of Mycoplasma pneumoniae, Mycoplasma salivarium, and Mycoplasma pulmonis for the lungs of conventional and gnotobiotic mice. J. Bacteriol. 92:1154–1163. 1966.—Two species of mycoplasma of human origin, Mycoplasma pneumoniae and M. salivarium, were tested for their ability to produce respiratory disease in the Ha/ICR mouse when inoculated by the intranasal route. The mouse pathogen M. pulmonis was studied as a positive control. Conventional and gnotobiotic Ha/ICR mice were employed, the latter to provide a system free from indigenous mycoplasma and bacteria. Pneumonia from which mycoplasma were isolated was produced in all groups of the conventional Ha/ICR mice, including those inoculated with sterile broth. Only M. pulmonis produced disease when inoculated intranasally into the gnotobiotic mice, and the gross and microscopic lesions resembled those described in conventional mice. The gnotobiotic mouse provided a tool to study the pathogenicity of different mycoplasma species, and indicated marked differences in host specificity that could not be clearly seen when conventional mice were used

The Effect of Multinational Firms' Operations on Their Domestic Employment

Given the level of its production in the U.S., a firm that produces more abroad tends to have fewer employees in the U.S. and to pay slightly higher salaries and wages to them. The most likely explanation seems to be that the larger a firm's foreign production, the greater its ability to allocate the more labor-intensive and less skill-intensive portions of its activity to locations outside the United States. This relationship is stronger among manufacturing firms than among service industry firms, probably because services are less tradable than manufactured goods or components, and service industries may therefore be less able to break up the production process to take advantage of differences in factor prices.

The Competitive Position of U.S. Manufacturing Firms

This paper distinguishes between the competitive position of U.S. firms and that of the U.S. and other countries as geographical locations for production. While the share of the U.S. in world exports of manufactures fellmore than 40 per cent between 1957 and 1977, the share of all U.S. firms from all locations declined much less and the share of U.S. multinational enterprises increased.The comparative advantage of U.S. multinational firms, as measured by the industry distribution of their exports from all locations, changed very little between 1966 and 1977. At the same time, there were large shifts in the comparative advantage of the parent firms in the U.S., their overseas affiliates, and foreign firms. The changes for the U.S. parents and their affiliates reflected differences among industries in the extent to which export production shares moved from the U.S. to the affiliates' host countries. The shift took place in all the industry groups but was largest for metals and chemicals and smallest for transport equipment. The rise in the share of world exports accounted for by U.S.multinational firms and the decline in the share of the U.S. as a geographical location suggests that the search for causes of the changed position of the U.S. should be directed not to deficiencies in American industrial or technological leadership but to other price and cost determining influences, such as productivity, wage setting, taxation, domestic inflation, and exchange rates.

Price Behavior in the Light of Balance of Payments Theories

The purpose of this paper is to describe the behavior of that subset of prices and price indexes that is relevant to the theory of balance of payments adjustment. The theoretical writings on the balance of payments may be viewed at this juncture as falling into two main groups -- the "standard" theories and the more recent monetary theories. Each of these is examined to determine the assumptions and predictions made about particular kinds of prices, and the empirical evidence regarding these prices is then set out. Although some assessment of the theories -- solely from the price aspect -- is offered, the emphasis is on the price structure and price behavior that ought to be captured in a satisfactory theory of the mechanisms of international adjustment. For pragmatic reasons, attention is placed mainly on the theory relating to exchange rate changes rather than on the explanation of adjustment with fixed exchange rates.