Social Accounting Matrix Data Research Articles

Labour market dynamics in the era of technological advancements: The system-wide impacts of labour augmenting technological change

The employment impact of future technological change is much debated. Some commentators predict devastating job losses, while others are more sanguine, claiming that technological change raises living standards without reducing total employment. Our analysis a use a combination of partial equilibrium and dynamic computable general equilibrium (CGE) analysis with neo-Keynesian characteristics. These models are employed to assess the implications of skill-biased labour-augmenting technological change. They are calibrated on recent German Social Accounting Matrix data and parameterised using the best available empirical results from developed economies. The numerical CGE multi-sectoral model simulates the system-wide impacts of pervasive technical change affecting all sectors of the economy. The model allows investigation of alternative scenarios based around a common economic structure and set of parameter values. The results suggest that labour-augmenting technological change typically stimulates GDP growth and long-run total employment. However, there are negative short- and medium-run employment and real wage implications which might require government policy intervention. The simulations indicate that for open developed economies, improving the efficiency of skilled workers, as opposed to unskilled workers, is the most beneficial. This improvement has positive long-run impacts that are spread across both skill classifications. On the other hand, increasing the efficiency of the unskilled produces negative impacts on skilled employment and real wages. Additionally, the openness of the economy to migration and trade are important in determining the scale of these system-wide effects.

Estimating induced effects in IO impact analysis: variation in the methods for calculating the Type II Leontief multipliers

Type II input–output (IO) multipliers are frequently used for impact analysis. Unfortunately, there is no standard way to calculate these. The fundamental issue is that these multiplier methods endogenise household consumption but all have drawbacks because the IO accounts are missing key information required to consistently link household income and consumption to domestic economic activity. Using compatible regional and national data sets, we evaluate the values for various IO Type II multipliers to a benchmark value calculated with the aid of social accounting matrix data. The results suggest that the variation in Type II IO multiplier values generated by these alternative methods is an empirically non-trivial issue.

EXPLORING THE EFFECTS OF INCREASED GOVERNMENT AGRICULTURAL EXPENDITURE ON NIGERIAN ECONOMY USING COMPUTABLE GENERAL EQUILIBRIUM MODELLING APPROACH

The study was conducted to examine the effects of increased government agricultural expenditure on Nigerian economy using computable general equilibrium (CGE) modelling approach. The research used simple, practically-oriented exposition of computable general equilibrium (CGE) modelling. The study relied strictly on secondary data, to estimate parameters of the model before simulation using the Nigerian Social Accounting Matrix (SAM) of 2012 as the base year data in General Algebraic Modelling System developed (GAMS) by IFPRI for this analysis. The 2012 SAM is the most recent SAM data for Nigeria. But after the parameters were estimated, the 2018 SAM data used for the simulation. This 2018 SAM data capture 83 activities, 84 commodities, 18 factors, 15 categories of households, 5 taxes, and 6 other accounts. The result shows that the introduction of 10% on government expenditure affects virtually many sector of Nigerian economy in a different ways. The findings of the study revealed that most macroeconomic variables have shown positive changes except for consumption in government investment which was reduce by 2.00%. The gross domestic product (GDP) at market prices increased by 0.28%, 1.05% on transport and communication and 0.73% for trade margin. On exports increase by 0.98 per cent, 0.36% and 0.59%. Other manufactured products increased by 2.1%, 0.7%, and 0.6%, other capital equally increases by 1.21%, 0.82% and 0.44%. Household income increase for rural for those with primary education at 0.22%, 1.7% and 1.72%. Changes in investment, affect rural labour for the non-school sector, which was reduced by 0.84%, although, the value of the land on government investments equally reduces by 0.69%, capital reduces by 0.76%, livestock equally reduces by 0.71%. The impact of 10.00% shock result in changes in urban household with primary education increases by 3.37% followed by labour household with secondary education with 3.17%. The study concluded, that application of 10.00% shocks impacted both positively and negatively on several sectors of the economy like GDP at market prices, sectoral GDP, prices, nominal household income and export. The study recommended the need for government at all tiers to examine the effect of such policy on other sectors of the economy. It is therefore recommended that Government should enhance expenditure by 10.00% to stimulate productivity, output and consumption, Govt. should support short term agricultural consumption subsidy policy measure, increase government investment on research and development (R&D).

Macroeconomic effects of semi-subsistence agricultural productivity growth: Evidence from Benin and extension to the WAEMU countries

This paper studies the macroeconomic effects of an agricultural productivity growth in a semi-subsistence agriculture. To that end, a dynamic computable general equilibrium (CGE) model is used with the 2015 social accounting matrix (SAM) data of Benin. The results, with a few exceptions, are then extended to the West African Economic and Monetary Union (WAEMU) countries based on their SAM data. The simulation results suggest that an agricultural productivity growth could improve the overall economic growth, reduce trade deficit and enable an increase in households’ incomes as well as government revenues. In particular, the food industry and the salary earning households appear to be the main beneficiaries. Overall, these results suggest that public policies that promote growth in food crops productivity may turn out to be more effective in achieving greater economic performance and poverty reduction.

Determination of economic sector in East Kalimantan, Indonesia

PurposeThis paper aims to analyze the superior economic sector by looking at its contribution to the gross regional domestic product (GRDP) of East Kalimantan Province, the economic base, the multiplier effect and the strength of inter-sectoral linkages.Design/methodology/approachThis study was designed through two research approaches, namely, quantitative and qualitative method. This is intended to complement the results of the phenomenon under study and to strengthen the analysis. Secondary data were analyzed by the level of contribution of the economic sectors to the GRDP, and the base sector was determined through the location quotient approach. The two methods of calculation helped to reveal the dominant economic sectors in East Kalimantan Province. The Input Output (IO) Table in 2016 was made up dated from the 2009 IO Table to be used as a basis for building Social Accounting Matrix data or known as the East Kalimantan Regional Socio-Economic Balance System (SEBS) (a matrix of 49 × 49 sectors) in 2017 by using the RAS method. To be consistent, these SEBS data are then aggregated so all commodities are combined into economic sectors used to determine the leading sector on the East Kalimantan Province SEBS in 2016 (a matrix of 41 × 41 sectors).FindingsBased on the assessment by scoring of the criteria for determining the leading economic sectors in East Kalimantan, i.e. the contribution of the economic sector to GRDP, the economic base, the multiplier effect (income, production factor, and output) and the linkages between sectors, both backward and forward linkage, shows the ten leading sectors as follows: the trade; paper and printed goods; financial institutions and other financial services; fertilizer; chemical and other rubber products; hotel and restaurant; general government; fisheries; excavation; and mining without oil and gas.Originality/valueSimilar research has never been done before in East Kalimantan; this is one of the originalities of this present study. No previous study has comprehensively studied the mediating effects of tourist value perception on the determination of economic sector, especially in Kalimantan, Indonesia.

Modelling energy and labour linkages: A CGE approach with an application to Iran

We develop a unique dynamic CGE model suitable for analysing the policy interrelationships between fuels, crude oil and the labour market. Special emphasis is placed on the modelling of energies, crude oil, and the factors of production in the economy. To fully outline the model's features, we build simulations that hypothesize removing fuel and crude oil subsidies in an oil exporting economy to assess their effects on the labour market. The model allows for extensive treatment of transition dynamics, featuring gradual as well as immediate removal of the subsidies. We focus on constructing two alternative simulations applied to a purpose built Social Accounting Matrix (SAM) of the Iranian economy, with the revenue from subsidy elimination redistributed to households as extra income or into increased investment. The study pays particular attention to SAM data construction of energy goods and factors of production. In the specific case of Iran, the model shows that rebating the revenue from subsidy removals to households affects the labour market adversely, while channelling revenue into investment improves labour fortunes in the long run. The model is sufficiently detailed and encompassing to allow for further applications to other countries and energy–labour policy issues.

An Analysis of the Possible Economic Effects of HIV/AIDS in Swaziland Using the SAM and CGE Models

This is a conceptual paper which was motivated by the fact that Swaziland does not have a Social Accounting Matrix (SAM) in place and as such there are many shocks that affect that country' economy but which cannot be analyzed effectively. Most notable of this is the economic effects of the HIV/AIDS scourge that is affecting that country of which it has been difficult to determine the effects it has had on the economy in an objective manner. This paper will highlight the usefulness of the SAM and Computable General Equilibrium (CGE) models in analyzing the possible economic effects of HIV/AIDS in Swaziland. The absence of a SAM for Swaziland means that empirical analysis of the effect of the disease on the economy could not be undertaken, but it is hoped that the arguments presented here will contribute to the use of these methods as tools for analyzing various shocks in an economy. The paper is divided into 4 parts. Part 1 is a brief introduction into the Swaziland economy, part 2 is a brief description of the SAM, description of CGE Modeling and a detailed application of the SAM data into the CGE modeling framework, part 3 introduces the HIV/AIDS situation in Swaziland and models its possible effects using a macroeconomic SAM and part 4 is the discussion and conclusion. The main aim of the paper then is to lay the basic framework to help small developing countries develop practical SAMs that will become an important tool in analyzing the performances of their economies.

Making unilateral trade liberalisation beneficial to the poor

In this paper, we investigate the impacts of unilateral import liberalisation by a representative South Asian developing economy, Nepal, and demonstrate those conditions required to make the impacts ‘pro-poor.’ Applying the Computable General Equilibrium model to Social Accounting Matrix data, we conclude that import liberalisation is growth-enhancing but that, unfortunately, the rich benefit more than do the poor. We envisage a restructured but plausible model economy that requires a transformational period of ten years, and simulate unilateral trade liberalisation but, in the context of a dynamic model. We conclude that improvement in efficiency parameters, reorganisation of investment patterns, along with reallocation of factors of production by both household group and activity type are required to make growth accrued by import liberalisation ‘pro-poor’ in developing economies such as that of Nepal.

Potential impacts of the devaluation of Nepalese currency: A general equilibrium approach

This paper measures the potential impacts of the devaluation of domestic currency of the small, developing, landlocked and transition South Asian economy of Nepal, which is lagging behind in policy studies. The impacts on growth, distribution, price changes in factor and product markets, and on selected macroeconomic features are measured. Using a computable general equilibrium model applied to social accounting matrix data, we conclude that devaluation is expansionary but mostly benefits the rich, thus leading to a more uneven income distribution. In general, the expansion of economic activities occurs in agricultural and industrial sectors, whereas services activities contract. However, when the rate of devaluation is high, the agricultural sector also starts contracting. To this typical developing economy, devaluation causes an improvement in saving investment and export/import ratios, whereas the budget deficit widens.

Dampak Krisis Ekonomi terhadap Distribusi Pendapatan di Indonesia: Analisa SNSE Indonesia 1995 dan 1998

This paper examines the income distributional impact of the 1997’s economic crisis that hit Indonesia using Social Accounting Matrix data for 1995 and 1998. Relying on a comparison of the distribution before and after crisis, the study suggest three main findings based on multiplier analysis. First, poor households have been harder hit by crisis than rich households. Second, there are indication that crisis making income transfer likely to occurs from consumer to producer. Third, it is hard to eliminate disparity in income distribution relying only on market mechanism. From impact analysis we obtain the result for policy recomendation. Agriculture price support policy tend to biased to rural rich households, while export promotion policy biased to urban rich households. Direct income transfers to poor household and income redistribution policy seems to be the best policy for improving the distribution of income after crisis.

Macroeconomic Reform and the Poor in The Gambia: A Computable General Equilibrium Analysis

ABSTRACT This paper explores the impact on the poorer segment of the Gambian populace of the macroeconomic reform program (ERP). The framework of a computable general equilibrium model based on the social accounting matrix data set is used to capture the various linkages within the Gambian economy at the macro level. The impact of a contraction in government spending and a currency devaluation on the consumption and real income of the poor is analyzed. The results show that a cut in public expenditure has negligible impact on the overall economy, slightly improving urban employment and the conditions of the urban poor, whereas a currency devaluation improves the income, consumption and employment of poorer households. The model also shows that results are sensitive to parameter specifications.