A SAM framework for general equilibrium modeling and economic policy analysis

Figures & data

Figure 1. Circular flow diagram of the economy.

Source: Trinh (2019)

Table 1. The structure of theoretical SAM

	Commodity C1	Factor C2	Households C3	Enterprises C4	Government C5	Financial C6	ROW C7	Total
Commod ity R1			Perso nal Expendi ture (C)	Capital Investment (I)	Government Expenditure (G)		Export (X)	Total Demand
Factor R2				Production Costs (KWK+ LWL)				Factor Demand
Households R3		Factor Costs (KWK + LWL)			Personal Subsidy (SbP)	Household Borrowing (Sc < 0)		Household Inflow
Enterprises R4	Domestic Production (GDP)				Enterprise Subsidy (SbF)	Enterprise Borrowing (П < 0)		Enterprise Inflow
Government R5			Personal Tax (TP)	Enterprise Tax (TF)		Fiscal Deficit (G > T)		Government Inflow
Financial R6			Household Lending (Sc>0)	Enterprise Lending (П > 0)	Fiscal Surplus (G < T)		Trade Surplus (X < N)	Financial Demand
ROW R7	Import (N)					Trade Deficit (X > N)		ROW Inflow
Total	Commodity Supply	Factor Supply	Household Outflow	Enterprise Outflow	Government Outflow	Financial Supply	ROW Outflow

Source: Trinh (2019)

Figure 2. Fund flows between the accounts in the economy.

Source: Santos (2010)

Table 2. The structure of the empirical SAM

	Product C1	Production C2	Factor C3	Current C4	Capital C5	Financial C6	ROW C7	Total
Product R1	Transaction costs (TTM)	Intermediate consumption (IC)		Final consumption (FC)	Gross capital formation (GCF)		Exports (EX)	Aggregate Demand
Production R2	Gross output (GO)							Production Value
Factor R3		Gross value added (GAV)					Factor income from RW (CFPEX)	Factor Income
Current R4	Net taxes on products (NTP)	Net taxes on domestic production (NTADM)	Gross national income (GNI)	Domestic current transfers (CT)			Current transfers from RW (CTEX)	Current Inflow
Capital R5				Gross saving (GS)	Domestic capital transfers (KT)	Net borrowing/lending (NLB)	Capital transfers from RW (KTEX)	Capital Inflow
Financial R6						Domestic financial transfers (FT)	Financial transfers from RW (FTEX)	Financial Inflow
ROW R7	Imports (IM)	Net taxes on foreign production (NTAIM)	Factor income to RW (CFPIM)	Current transfers to RW (CTIM)	Capital transfers to RW (KTIM)	Financial transfers to RW (FTIM)		ROW Inflow
Total	Aggregate Supply	Production Cost	Factor Outcome	Current Outflow	Capital Outflow	Financial Outflow	ROW Outflow

Source: Adapted from Santos (2010)

Table 3. The aggregate economic indicators in the empirical SAM

SAM			Aggregate economic indicators
Row	Column	Description (valuation)	SNA Code	Description (valuation)
R2	C1	Production (basic prices)	P1	Gross output (basic prices)
R4	C1	Net taxes on products	D21-D31	Taxes on products minus subsidies on products
R7	C1	Imports (cif prices)	P7	Imports of goods and services (cif prices)
R1	C7	Exports (fob prices)	P6	Exports of goods and services (fob prices)
R1	C2	Intermediate consumption (purchasers’ prices)	P2	Intermediate consumption (purchasers’ prices)
R1	C4	Final consumption (purchasers’ prices)	P3	Final consumption (purchasers’ prices)
R1	C5	Investment capital	P5	Gross capital formation
R3	C2	Gross added value (factor costs)	D1 + B2g + B3g	Compensation of domestic factors
R4	C2	Net taxes on domestic production	D29- D39	Taxes on production minus Subsidies on production
R7	C2	Nets taxes on foreign production
R4	C3	Gross national income	B5g	Gross national income
R7	C3	Factor income to the RW(resources)	D1+ D4	Compensation of foreign factors
R3	C7	Factor income from the RW(uses)
R4	C4	Domestic current transfers institutions	D5+ D6+ D7 + D8	Current transfers
R7	C4	Current transfers to the RW (resources)
R4	C7	Current transfers from the RW (uses)
R5	C4	Gross saving	B8g	Gross saving
R5	C5	Domestic capital transfers	D9	Capital transfers
R5	C7	Capital transfers from the RW (uses)
R7	C5	Capital transfers to the RW (resources)
R5	C6	Net borrowing/lending (+lending/-borrowing)	B9	Net borrowing/lending (+lending/-borrowing)
R6	C6	Domestic financial transfers	F1→F8	Financial transfers
R7	C6	Financial transfers to the RW (resources)
R6	C7	Financial transfers from the RW (uses)

Source: Santos (2011) and Author’s study.

Table 4. The aggregate economic indicators in SAM

Aggregate economic indicators	The theoretical SAM	The empirical SAM
Final consumption	C + G	FC
Investment capital	I	GCF
Exports	X	EX
Imports	N	IM
Gross domestic product	GDP	-
Net taxes and subsidies	T	NTP + NTA
Domestic factor income	K× WK + L× WL	-
Gross value added	-	GAV
Gross national income	-	GNI

Source: Author’s research.

Table 5. The statistical data for the empirical SAM

	Product C1	Production C2	Factor C3	Current C4	Capital C5	Financial C6	ROW C7	Total
Product R1		1883		1399	414		540	4236
Production R2	3604							3604
Factor R3		1663					44	1707
Current R4	133	62	1669	1168			17	3049
Capital R5				427	61	−10	1	479
Financial R6						379	47	426
ROW R7	499	−4	38	55	4	57		649
Total	4236	3604	1707	3049	479	426	649

Source: Author’s calculations from SNA 2008 (United Nations., European Commission., International Monetary Fund., Organisation for Economic Co-operation and Development. and World Bank, 2009).

Table 6. The experimental data of the theoretical SAM

	Commodity C1	Factor C2	Households C3	Enterprises C4	Government C5	Financial C6	ROW C7	Total
Commodity R1			1047	414	352		540	2353
Factor R2				752				752
Households R3		752				295		1047
Enterprises R4	1854							1854
Government R5				191		161		352
Financial R6				497				497
ROW R7	499					41		540
Total	2353	752	1047	1854	352	497	540

Source: Author’s calculations from SNA 2008 (United Nations., European Commission., International Monetary Fund., Organisation for Economic Co-operation and Development. and World Bank, 2009).

Figure 3. The approach for GDP measurement of sector i.

Source: Trinh (2017), Trinh (2018)

Table 7. System parameters of the economy

Sectors	Symbol	Agriculture	Industry	Services
Total factor productivity	Aj	1	0.8	1.2
Output elasticity of capital	αj	0.6	0.5	0.7
Output elasticity of labor	βj	0.4	0.5	0.3
Initial equilibrium quantity of capital	K0j	30	15	45
Initial equilibrium quantity of labor	L0j	25	30	20
Initial equilibrium price of capital	wKj	6	5	7
Initial equilibrium price of labor	wLj	5	5	6
Initial equilibrium price of final commodity	pj	25	20	30
Initial equilibrium quantity of final commodity	Qj	27.89	16.97	42.34
Ratio of export price and domestic price	REXj	1	1.1	0.9
Current sector structure	%GDP	30%	35%	35%

Source: The hypothetical data for the experimental simulation.

Table 8. Elasticity of input factors

Elasticity of input factors	Capital demand DK	Labor demand DL
Capital price wK	$E_{DK}^{wK}=-0.5$	$E_{DL}^{wK}=2$
Labor price wL	$E_{DK}^{wL}=1$	$E_{DL}^{wL}=-1$

Source: The hypothetical data for the experimental simulation.

Table 9. Elasticity of final commodities

Elasticity of final commodities	Agriculture demand D1	Industry demand D2	Service demand D3
Agriculture price p1	$E_{D1}^{p1}=-1$	$E_{D2}^{p1}=0.5$	$E_{D2}^{p1}=1$
Industry price p2	$E_{D1}^{p2}=0.5$	$E_{D2}^{p2}=-0.8$	$E_{D3}^{p2}=-1.5$
Service price p3	$E_{D1}^{p3}=-0.5$	$E_{D2}^{p3}=-1$	$E_{D3}^{p3}=-1.2$
Income I	$E_{D1}^I=0$	$E_{D2}^I=-0.5$	$E_{D3}^I=0.5$

Source: The hypothetical data for the experimental simulation.

Table 10. Policy parameters of the economy

Sectors	Symbol	Constraint	Value
Net taxes and subsidies	T0	=	13.26% ×(GDP—I)
Investment capital	I0	=	28.75%×(GDP—I)
Government balance	G—T	≤	10%×GDP
Trade balance	X—N	≤	20%×GDP
Investment-saving balance	G—T + X- N	≥	20%×GDP

Source: The hypothetical data for the experimental simulation.

Table 11. Simulation results of the economy

Indicators	Formula	Model 1	Model 2	Model 3
Total output	$Q_j=Q_{Cj}+Q_{Gj}+Q_{NXj}$	58.22	80.98	82.86
Personal expenditure	$C=\sum _{j=1}^m{p}_j\times Q_{Cj}$	1047.00	1118.79	1178.34
Government expenditure	$G=\sum _{j=1}^m{p}_j\times Q_{Gj}$	352.00	479.52	505.04
Household saving	$S_C=\sum _{j=1}^m\left(K_j\times w_{Kj}+L_j\times w_{Lj}\right)-\sum _{j=1}^m{p}_j\times Q_{Cj}$	−295	−317.22	−390.96
Enterprise saving	$S_F=\sum _{j-1}^m{p}_j\times Q_j^{\hspace{0.17em}}-\sum _{j=1}^m{K}_j^{\hspace{0.17em}}\times W_{Kj}^{\hspace{0.17em}}-\sum _{j=1}^m{L}_j^{\hspace{0.17em}}\times W_{Lj}^{\hspace{0.17em}}-\sum _{j=1}^m{T}_j$	497.00	789.60	888.48
Government saving	$S_G=\sum _{j=1}^m{T}_j-\sum _{j=1}^m{p}_j\times Q_{Gj}$	−161	−236.19	−248.76
Total saving	$S=S_C+S_F+S_G$	41	236.19	248.76

Source: Trinh (2019) and Author’s research.

Table 12. The simulation results of GDP and macro balances

Indicators	Formula	Model 1	Model 2	Model 3
% Agriculture	$X_1$	30%	30%	30%
% Industry	$X_2$	35%	35%	30%
% Services	$X_3$	35%	35%	40%
GDP	$GDP$	1854.00	2361.92	2487.63
Government Balance	$\sum _{j=1}^m{p}_j\times Q_{Gj}-\sum _{j=1}^m{T}_j$	161	236.19	248.76
Trade Balance	$\times Q_{Gj}-\underset{j}{\overset{\hspace{0.17em}}{\sum _{j=1}^{m}T}}\sum _{j=1}^m{p}_j$	41	236.19	248.76
Investment-saving Balance	$\sum _{j=1}^m{p}_j\times Q_{Gj}+\sum _{j=1}^m{p}_j\times Q_{NXj}\times R_{EXj}-\sum _{j=1}^m{T}_j$	202	472.38	497.53

Source: Trinh (2019) and Author’s research.

Table 13. The GDP structure under the expenditure approach

Indicators	Symbol	Model 1	Model 2	Model 3
Personal expenditure	C	1047.00	1118.79	1178.34
Capital investment	I	414.00	527.42	555.49
Government expenditure	G	352.00	479.52	505.04
Net export	NX	41.00	236.19	248.76
Gross Domestic Product	GDP	1854.00	2361.92	2487.63

Source: Author’s calculation.

Table 14. The GDP structure under the income approach

Indicators	Symbol	Model 1	Model 2	Model 3
Capital interest	K× WK	459.71	445.53	422.09
Labor wage	L× WL	292.30	356.05	365.29
Enterprise saving	П	497.00	789.60	888.48
Investment capital	I	414.00	527.42	555.49
Nets taxes and subsidies	T	191.00	243.33	256.28
Gross Domestic Product	GDP	1854.00	2361.92	2487.63

Source: Author’s calculation.

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