The CGE Model Database: A Social Accounting Matrix

Abstract

In this chapter, we describe the computable general equilibrium (CGE) model database. The database reports the value of all transactions in an economy during a period of time. The database can be organized and displayed as a Social Accounting Matrix (SAM), a logical framework that provides a visual display of the transactions as a circular flow of national income and spending. The SAM's microeconomic data describe transactions made by each agent in the economy. When aggregated, the SAM's microdata describe the economy's macroeconomic behavior. The SAM's microdata can also be used to calculate descriptive statistics on an economy's structure and tax rates. Introduction to the Social Accounting Matrix The database of a CGE model reports the value of all transactions in the circular flow of national income and spending in an economy over a specified period of time, usually a year. The model database that we use throughout this book, for demonstration, describes economic activity in the United States and the rest-of-world economies during 2004. A CGE model's database can be organized into a table called a Social Accounting Matrix (SAM) (see Text Box 3.1). The SAM table is a logical arrangement of the model's database to provide an easy-to-read, visual display of the linkages among agents in the economy. Agents typically include industries, factors of production (e.g., labor and capital), household consumers, the government, and the rest-of-world region, which supplies imports and demands exports.