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Sufficiency Economy Matrices: Multi-Period Optimization for Local Development Planners

Author

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  • Peter Calkins

    (Faculty of Economics, Chiang Mai University, Thailand and CREA, Laval University, Canada)

Abstract

Unprecedented resource, economic, and social constraints now require social and economic planners to view 5-year plans as a problem of constrained optimization. Analyses of social accounting matrices have typically been limited to multiplier analyses, which proceed by trial and error and largely ignore such constraints. Lagrangians expressly take constraints into account, but become impracticable as the number of production, sales, consumption, investment, government, and trading activities multiplies; resource and ethical constraints increase; and decision makers become increasingly leery of downside risk. MOTAD programming models are an effective way to analyze complex decisions of this type, but they have not been applied to social accounting matrices in the past, nor have they included such ethical principles as those contained in Thailand's Sufficiency Economy philosophy. This research applies constrained optimization, risk programming, and the sufficiency economy philosophy to a case study of a sub-district in Northern Thailand. A seven-step process takes local decision-makers and planners from their current sub-optimal, unprotected situation to an optimal, "immunized" 5-year plan. Shadow price analyses, sufficiency economy indicators and parametric programming are also integrated into the 7-step procedure.

Suggested Citation

  • Peter Calkins, 2009. "Sufficiency Economy Matrices: Multi-Period Optimization for Local Development Planners," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, vol. 5(2), pages 305-332, July.
    • Handle: RePEc:jec:journl:v:5:y:2009:i:2:p:305-332
    as

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    References listed on IDEAS

    as
    1. Boulding, Kenneth E., 1981. "Agricultural Economics In An Evolutionary Perspective," 1981 Annual Meeting, July 26-29, Clemson, South Carolina 279250, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Kenneth E. Boulding, 1981. "Agricultural Economics in an Evolutionary Perspective," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(5), pages 788-795.
    3. William Lin & G. W. Dean & C. V. Moore, 1974. "An Empirical Test of Utility vs. Profit Maximization in Agricultural Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(3), pages 497-508.
    4. Porter, R. Burr, 1973. "An Empirical Comparison of Stochastic Dominance and Mean-Variance Portfolio Choice Criteria," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 8(4), pages 587-608, September.
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    Cited by:

    1. Jintanee Jintranun & Peter Calkins & Songsak Sriboonchitta, 2013. "Sufficiency Economy Matrix multiplier analysis and optimization: The case of Mukdahan, Thailand," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 2(2), pages 1-26., June.
    2. Peter Calkins & Songsak Sriboonchitta & Aree Wiboonpongse, 2009. "Econometric Advances in the Service of Macroeconomic Prediction and Planning: An Overview," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, vol. 5(2), pages 159-166, July.

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    More about this item

    Keywords

    social accounting; linear programming; sufficiency economy; bottom-up planning;
    All these keywords.

    JEL classification:

    • B00 - Schools of Economic Thought and Methodology - - General - - - History of Economic Thought, Methodology, and Heterodox Approaches
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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