Transcript SOCIAL ACCOUNTING MATRICES AND THEIR USE IN …

SOCIAL ACCOUNTING MATRICES AND THEIR USE IN
ECONOMICS MODELLING
Workshop at CIEM, Hanoi, 16 January
2009
Finn Tarp
Department of Economics
University of Copenhagen
http://www.econ.ku.dk/ftarp/
Outline
•
•
•
•
•
Introduction
SAM: an overview from a macro perspective
SAM: going back to the micro foundations
Vietnam SAMs
Conclusion
2
SAM from a macro perspective



Overview – the basic idea
The individual cells
Macroeconomic accounting identities in a SAM
context
Simple Open Economy Real SAM
GOODS
GOODS
AGENTS
S-I
ROW
C
I
E*X
GDP
S-I
ROW
AGENTS
S
E*M
E*CURR
Social Accounting Matrices (SAMs)
Expenditures
Receipts
1
2
3
4
5
Total
1. Suppliers
-
C
G
I
X
Demand
2. Households
Y
-
-
-
-
Income
3. Government
-
T
-
-
-
Receipts
4. Capital Accnt.
-
Sh
Sg
-
Sf
Savings
5. Rest of World
Z
-
-
-
-
Imports
Supply
Expenditure
Expenditure
Investment
ROW
Total
Additional variables
Sh = Private Savings
Social Accounting Matrices (SAMs)
Expenditures
Receipts
1
2
3
4
5
Total
1. Suppliers
-
C
G
I
X
Demand
2. Households
Y
-
-
-
-
Income
3. Government
-
T
-
-
-
Receipts
4. Capital Accnt.
-
Sh
Sg
-
Sf
Savings
5. Rest of World
Z
-
-
-
-
Imports
Supply
Expenditure
Expenditure
Investment
ROW
Total
Additional variables
Sg = Government Savings
Social Accounting Matrices (SAMs)
Expenditures
Receipts
1
2
3
4
5
Total
1. Suppliers
-
C
G
I
X
Demand
2. Households
Y
-
-
-
-
Income
3. Government
-
T
-
-
-
Receipts
4. Capital Accnt.
-
Sh
Sg
-
Sf
Savings
5. Rest of World
Z
-
-
-
-
Imports
Supply
Expenditure
Expenditure
Investment
ROW
Total
Additional variables
T = Tax Payments
Social Accounting Matrices (SAMs)
Expenditures
Receipts
1
2
3
4
5
Total
1. Suppliers
-
C
G
I
X
Demand
2. Households
Y
-
-
-
-
Income
3. Government
-
T
-
-
-
Receipts
4. Capital Accnt.
-
Sh
Sg
-
Sf
Savings
5. Rest of World
Z
-
-
-
-
Imports
Supply
Expenditure
Expenditure
Investment
ROW
Total
Additional variables
Sf = Foreign Savings
Social Accounting Matrices (SAMs)
Expenditures
Receipts
1
2
3
4
5
Total
1. Suppliers
-
C
G
I
X
Demand
2. Households
Y
-
-
-
-
Income
3. Government
-
T
-
-
-
Receipts
4. Capital Acc.
-
Sh
Sg
-
Sf
Savings
5. Rest of World
Z
-
-
-
-
Imports
Supply
Expenditure
Expenditure
Investment
ROW
Total
Additional variables
G = Government Spending
Social Accounting Matrices (SAMs)
Expenditures
Receipts
1
2
3
4
5
Total
1. Suppliers
-
C
G
I
X
Demand
2. Households
Y
-
-
-
-
Income
3. Government
-
T
-
-
-
Receipts
4. Capital Acc.
-
Sh
Sg
-
Sf
Savings
5. Rest of World
Z
-
-
-
-
Imports
Supply
Expenditure
Expenditure
Investment
ROW
Total
Accounting Identities:
Mat. Bal.
Y+Z=C+G+I+X
Social Accounting Matrices (SAMs)
Expenditures
Receipts
1
2
3
4
5
Total
1. Suppliers
-
C
G
I
X
Demand
2. Households
Y
-
-
-
-
Income
3. Government
-
T
-
-
-
Receipts
4. Capital Acc.
-
Sh
Sg
-
Sf
Savings
5. Rest of World
Z
-
-
-
-
Imports
Supply
Expenditure
Expenditure
Investment
ROW
Total
Accounting Identities:
Income
C + T + Sh = Y
Social Accounting Matrices (SAMs)
Expenditures
Receipts
1
2
3
4
5
Total
1. Suppliers
-
C
G
I
X
Demand
2. Households
Y
-
-
-
-
Income
3. Government
-
T
-
-
-
Receipts
4. Capital Acc.
-
Sh
Sg
-
Sf
Savings
5. Rest of World
Z
-
-
-
-
Imports
Supply
Expenditure
Expenditure
Investment
ROW
Total
Accounting Identities:
Govt. Budget
G + Sg = T
Social Accounting Matrices (SAMs)
Expenditures
Receipts
1
2
3
4
5
Total
1. Suppliers
-
C
G
I
X
Demand
2. Households
Y
-
-
-
-
Income
3. Government
-
T
-
-
-
Receipts
4. Capital Acc.
-
Sh
Sg
-
Sf
Savings
5. Rest of World
Z
-
-
-
-
Imports
Supply
Expenditure
Expenditure
Investment
ROW
Total
Accounting Identities:
Saving-Investment
I = Sh + Sg + Sf
Social Accounting Matrices (SAMs)
Expenditures
Receipts
1
2
3
4
5
Total
1. Suppliers
-
C
G
I
X
Demand
2. Households
Y
-
-
-
-
Income
3. Government
-
T
-
-
-
Receipts
4. Capital Acc.
-
Sh
Sg
-
Sf
Savings
5. Rest of World
Z
-
-
-
-
Imports
Supply
Expenditure
Expenditure
Investment
ROW
Total
Accounting Identities:
Trade Balance
X + Sf = Z
Back to the microfoundations - Inputoutput: a three sector economy
• Input-output concept simple. Consider the production of the ith sector.
• We may isolate (1) flows xij from that industry to other industries; (2) the quantity of that
production that goes to final demand, ci, and (3) total output, xi.
• Put in a transactions tableau
Economic
Activities
Inputs to
Agriculture
Inputs to
Manufacturing
Inputs to
Transport
Final
Demand
Total Output
5
15
2
68
90
Manufacturing
10
20
10
40
80
Transportation
10
15
5
0
30
Labor
25
30
5
0
60
Agriculture
or
15
The Leontief coefficients
Leontief, the innovator of input-output analysis, uses a special production function which
depends linearly on the total output variables xi. Using Leontief coefficients aij, we may
:
manipulate our transactions information into what is known as an input-output table:
or
16
Next step
Rewriting finally yields
17
One more step
Introducing matrix notation, we can see how a solution may be
obtained. Let
denote the total output vector, the final demand vector, the unit matrix and the
input-output matrix, respectively.
18
Key result
19
Input-output analysis: discussion
•
•
•
•
•
•
No supply constraints
No substitution (input coefficients are constant) (marginal input
coefficients = average) – what happens in the growth process?
External economies are ruled out, constant returns to scale
assumed
If sectoral linkages weak, the IO is of limited value
What about the optimal choice of technique? -> Linear
programming …
What about feedback effects from income-expenditure behaviour
etc.? -> SAM modelling …
20
The next step: Why Build SAMs?



Macro policy and IO production structure relations are
important
But so is wider economic structure and economic
interactions between sectors and institutions of the
economy, on the one hand, and between the domestic
economy and the rest of the world (ROW), on the other
We want to understand these interactions to formulate
appropriate policy recommendations - we need a framework
(or accounting device) in which to organize our structural
and institutional data
21
What is a SAM?





A Social Accounting Matrix (SAM) is a square matrix that builds on the
input-output table - but the SAM goes further
A SAM considers not only production linkages, but tracks incomeexpenditure feedbacks (institutions are introduced)
Each “transactor” (such as factors of production, households, enterprises,
the government and the ROW) has a row and a column – double entry
national income accounting (row totals therefore equal to corresponding
column total)
A SAM is a consistent data system that provides a snapshot of the
economy in a given year
Note that the SAM reconciles data from different sources and we often
talk about the SAM as consisting of two corresponding layers: the MacroSAM and the Micro-SAM
22
What is a Macroeconomic SAM?








The Macro-SAM is the upper (aggregate) layer of the
SAM
Try to visualize (open a door and look into an office
or library)
Technically: the Macroeconomic SAM is an extension
(or matrix representation) of basic national income
identities:
Y+M=C+G+I+E
(GNP)
C + T + Sh = Y
(Income)
G + Sg = T
(Govt. Budget)
I = Sh + Sg + Sf
(Savings-Investment)
E + Sf = M
(Trade Balance)
23
Schematic Macroeconomic SAM
Expenditures
Receipts
1
2
3
4
5
Total
1. Suppliers
-
C
G
I
E
Demand
2. Households
Y
-
-
-
-
Income
3. Government
-
T
-
-
-
Receipts
4. Capital Acct.
-
Sh
Sg
-
Sf
Savings
5. Rest of World
M
-
-
-
-
Imports
Total
Supply
Expenditure
Expenditure
Investment
ROW
24
Generic Macro-SAM
Expenditures
Receipts
1. Activties
1.
2.
Intermediate
consumption
3.
Value added
2. Commodities
3.Factors
Marketed
production
Home
cons.
Marketing
margins
Private
marketed
sons.
4.
5.
Gross
profits
6.
Commodity
taxes
Factor
taxes
7.
9.
Total domestic
payments
6.Recurrent State
7.Invest
ment/
Savings
8.Rest of
World
9.Total
Total
domestic
sales
State
cons.
Dist.
Profits,
social
security
Income
taxes
Enterpr.
taxes
Household
savings
Retained
earnings
Investment
Exports
Total
comm.
demand
Total
commodity
supply
Social
Security,
other
current
transfers
Net
foreign
transfers
Private
household
Income
Entrpr.
subsidies
Net
foreign
transfers
Enterp.
Income
Net
foreign
transfers
State
Revenue
State
savings
Total
savings
Enterpr.
Remitt.
Imports
8.
5.Enterpri
ses
Value
added
Wages,
salaries,
enterprise
profits
Value added
and other
production
taxes
4.Private
Households
Total
factor
payments
Allocation
private
household
Total
entr.
payments
Imports,
remitt.
Allocation
of state
revenue
Total
investment
Total
foreign
exchan-
25
What is a Microeconomic SAM?



The Micro-SAM is the lower (disaggregated) layer of the SAM
Try to visualize (being inside an office or library - look around)
Technically: each of the 81 (=9x9) cells in the macro-SAM are
disaggregated so as to capture detailed interdependencies
between institutions and sectors
26
Additional remarks
 SAMs are an economy-wide accounting device that captures the
many interdependencies among sectors and institutions in the economy
 As such SAMs are useful in their own right through inspection –
descriptive analyses of the structure of the economy (at various
levels of aggregation!)
 And the SAMs become the basis for detailed multiplier analyses that
go well beyond traditional input-output multiplier analysis
 Finally, the SAMs form the informational basis for the building and
calibration of (applied) computable general equilibrium (CGE)
models.
 CGE models are important analytical tools for policy support. They
take explicit account of the importance of price-mediated resource
allocation, the hallmark of a market economy – used to analyse
issues such as the distribution of the benefits of growth and
economic reform, including increased international economic
integration
27
Multiplier Analysis
The SAM accounts can give detailed information about
direct and indirect income and expenditure linkages in
the economy. For the economywide SAM, one uses
the basic multiplier calculation
Svv
Sxv
Svx
Sxx
M = (I – A)-1
where M is the square matrix of multipliers for exogenous
demand changes on endogenous accounts, and A is the
coefficients (expenditure) matrix of endogenous accounts
(note: mij = income multiplier for i arising from j)
28
Multisectoral models: the SAM (Ghatak
Table 11.1)
29
Multisectoral models: Separating the
accounts (Ghatak Table 11.2)
30
The SAM multiplier (Ghatak Table 11.3 first
part)
31
The SAM multiplier (Ghatak Table 11.3
second part)
32
SAM multipliers - discussion
•
•
•
Fixed coefficients, no substitution
No supply constraints, demand driven (fixed price
response to exogenous change)
To capture substitution in supply and demand and price
adjustments -> CGE (but beyond scope here....)
33
Introduction - Vietnam
 Institutional background and acknowledgments
 The CIEM-NIAS project
 CIEM-DoE research collaboration
 GSO, Danida etc.
 The 1999 and the first 2000 Vietnam Social Accounting
Matrices (SAMs) (published in 2001 and 2002)
 Some economic analyses carried out
 A reference to the international conference on
“Vietnam’s international economic integration Opportunities and challenges" held in March 2004
 http://eurasia.nias.ku.dk/ciemnias
 http://www.ciem.org.vn
 SAM revision and updating an ongoing process
CIEM
Seminar,
Why Build SAMs? A recap



Macro policy is important
But so is economic structure and economic
interactions betweens sectors and institutions of the
economy, on the one hand, and between Vietnam
and the rest of the world (ROW), on the other
We want to understand these interactions to
formulate appropriate policy recommendations - we
need a framework (or accounting device) in which to
organize our structural and institutional data
CIEM
Seminar,
Table 3.1: Dimensions of the SAM
1.Activities
(112)
1 (112)
2 (114)
114 x
112
3 (14)
14 x
112
2.Commodities
(114)
3.Factors
(14)
112 x
114
112 x
16
114 x
114
114 x
16
16 x 14
5 (3)
3 x 14
8 x 112
8 x 114
8 x 14
7 (1)
8 (1)
Total
6.Recurrent
State
(1+7)
7.Investment/
Saving
(1)
8. ROW
(1)
Total
112 x 1
114 x 8
16 x 3
114 x 1
114 x 1
114 x 1
1 x 114
1 x 14
16 x 8
16 x 1
16 x 1
3x1
3x1
8x1
8x1
8 x 16
8x3
1 x 16
1x3
1x8
1x1
1x3
1x8
1x 1
1x3
1x8
1 x 114
1 x 112
5.Enterprises (3)
14 x 1
4 (16)
6 (1+7)
4.Households
(16)
1 x 16
1x1
1x1
The New 2000 Vietnam Micro-SAM - An
Overview
 In sum, a 269x269 matrix
 112/114 domestic production
activities/commodities
 14 factors of production
16 household types
3 types of enterprises (private, public, and foreign)
1 state
7 taxes
1 consolidated capital (investment/savings)
account
 1 balance of payments (with details on 194
international trading partners for the 114
commodities)





CIEM
Seminar,
Labour Force Disaggregation
12 labour categories:
Factors
Rural
Male
Skille M.
Skilled
d
Urban
Female
Unskille Skille M.
d
Skilled
d
Male
Unskille
d
Skille M.
Skilled
d
Female
Unskille
d
Skille M.
Skilled
d
Unskille
d
CIEM
Seminar,
Household Disaggregation
16 types:
Household
Rural
Male
Self-empl.
farmers
Self-empl nonfarmer
Urban
Female
Wage-earners
Non-employed
Male
Self-empl.
farmers
Female
Self-empl nonfarmer
Wage-earners
Non-employed
CIEM
Seminar,
Tax disaggregation (7 categories)
Value added tax (VAT)
Production tax (PTAX)
Special consumption sales tax
(STAX)
Import tariffs (TARIFF)
Factor taxes (FTAX) (divided into
land and capital factor taxes)
Enterprise taxes (ETAX)
Household taxes (HTAX)
CIEM
Seminar,
On 2003 Vietnam SAM:
Construction & Description
SAM Construction Methodology
•
•
•
•
Unbalanced Macro SAM (Primary Data Sources)
Balanced Macro SAM (Statistical Balancing)
Unbalanced Micro SAM (Primary Data & Macro SAM Totals)
Balanced Micro SAM (Statistical Balancing)
2003 Vietnam SAM accounts (274)
•
•
•
•
Goods Accounts: Activities (112), Commodities (112), Trade
Margins (3) & Transportation Margins (3)
Factor Accounts: Land (1), Labor (12) & Capital (1)
Institutional Current Accounts: Enterprises (1), Households
(16), Government (7) & Rest of World (1)
Institutional Capital Accounts: Private (2), Government (2) &
Aggregate (1)
Final Remarks (1)
 SAMs are an economy-wide
accounting device that captures the
many interdependencies among
sectors and institutions in the economy
 As such SAMs are useful in their own
right through inspection – descriptive
analyses of the structure of the
economy (at various levels of
aggregation!)
 And the SAMs become the basis for
detailed multiplier analyses that go
well beyond traditional input-output
multiplier analysis
CIEM
Seminar,
Final Remarks (2)
 Finally, the SAMs form the
informational basis for the building and
calibration of (applied) computable
general equilibrium (CGE) models.
 CGE models are important analytical tools for
policy support. They take explicit account of the
importance of price-mediated resource
allocation, the hallmark of a market economy,
and are therefore well suited to analyse issues
such as the distribution of the benefits of growth
and economic reform, including increased
international economic integration
 A word on future SAM work, f.ex.
 General updating, VHLSS and new national
accounts
 SME and household surveys
 Regionalization
 Environmental issues
CIEM
Seminar,
Conclusions
•
•
•
•
Is planning a good idea?
How has planning been imlemented in the past?
What role for planning in the future?
What is the role of SAMs?
44