ABSTRACT
The 1987 World Development Report states that the share of services in the United States' gross domestic product rose from 59% in 1965 to 67% in 1985, while their share in employment in the same period rose from 60% to 66%. This chapter outlines a formal model which introduces and utilizes the concept of simultaneity factor (S-factor), which focuses on the interaction between suppliers and users of the output of production processes. It discusses the relationship between the S-factor and different modes of supplier/user interaction. The thrust of the analytical framework developed is that the S-factor is trade inhibiting. The chapter considers the impact of the S-factor on the international tradability of services and of goods with varying service-intensities. It presents the empirical evidence on international tradability. The chapter examines alternative modes of domestic and international transactions in services and in service-intensive goods.
