A Conceptual Framework for a Computable General Equilibrium Model Based on the South African Social Accounting Matrix

Abstract

A number of papers have already made out the case for SAM-based modelling in South Africa. A SAM in itself, however, is not a model, but a large-scale identity which needs to be linked to a model of the causal relationships among variables. This paper sets out to illustrate how the Transactions Value (TV) approach can serve as a conceptual framework whereby SAMs in South Africa can be linked to a model. The implementation of the TV approach through the appropriate computer software is discussed, and the limitations of SAM-based modelling pointed out. Finally it is suggested that the basic requirements for a relevant SAM-based CGE-model should provide an agenda for the revision and improvement of the national accounts, in line with recent recommendations from the United Nations’ Statistical Office.