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Social accounting matrices and applied general equilibrium models

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  • Timothy J. Kehoe

Abstract

To illustrate the use of social accounting matrices (SAMs) in applied general equilibrium (GE) modeling, we use an aggregated SAM for the Spanish economy to calibrate a simple applied GE model. The idea is to construct artificial people - households, government, and a foreign sector - who make the same transactions in the equilibrium of the model economy as do their counterparts in the data. This calibration procedure can be augmented, or partially substituted for, by statistical estimation of key parameters. We show the usefulness of such a model by presenting the results of a comparative exercise that mimics the policy changes that took place in Spain during its 1986 integration into the European Community. Sub-sequent data shows the model results to be remarkably accurate, especially if we account for other major shocks affected the Spanish economy in 1986.

Suggested Citation

  • Timothy J. Kehoe, 1996. "Social accounting matrices and applied general equilibrium models," Working Papers 563, Federal Reserve Bank of Minneapolis.
  • Handle: RePEc:fip:fedmwp:563
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    References listed on IDEAS

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    9. Dawkins, Christina & Srinivasan, T.N. & Whalley, John, 2001. "Calibration," Handbook of Econometrics,in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 58, pages 3653-3703 Elsevier.
    10. Kehoe, Timothy J. & Noyola, Pedro Javier & Manresa, Antonio & Polo, Clemente & Sancho, Ferran, 1988. "A general equilibrium analysis of the 1986 tax reform in Spain," European Economic Review, Elsevier, vol. 32(2-3), pages 334-342, March.
    11. Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-1051, September.
    12. Patrick J. Kehoe & Timothy J. Kehoe, 1994. "A primer on static applied general equilibrium models," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 2-16.
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    Citations

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    Cited by:

    1. Adelar Fochezatto & Rosana Curzel, 2001. "Método de Obtenção da Matriz de Contabilidade Social Regional: Rio Grande do Sul, 1995," Anais do XXIX Encontro Nacional de Economia [Proceedings of the 29th Brazilian Economics Meeting] 083, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    2. Francisco Sáez & Fernando Alvarez & Jesús Morales & Giovanni Guedez, 2011. "Expectations, Inter-Sectorial Relationships and the Business Cycle," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(63), pages 97-147, July - Se.
    3. Ignacio Cazcarro & Rosa Duarte & Julio Sanchez Choliz & Cristina Sarasa, 2011. "Water Rates And The Responsibilities Of Direct, Indirect And End-Users In Spain," Economic Systems Research, Taylor & Francis Journals, vol. 23(4), pages 409-430, August.
    4. Cho, Sang-Wook (Stanley) & Díaz, Julián P., 2013. "Trade integration and the skill premium: Evidence from a transition economy," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 601-620.
    5. Andreas Peichl, 2009. "The benefits and problems of linking micro and macromodels - Evidence from a flat tax analysis," Journal of Applied Economics, Universidad del CEMA, vol. 12, pages 301-329, November.
    6. (Stanley) Cho, Sang-Wook & P. Díaz, Julián, 2008. "Trade Liberalization in Latin America and Eastern Europe: the Cases of Ecuador and Slovenia," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 1002-1045.
    7. Peichl, Andreas, 2005. "Die Evaluation von Steuerreformen durch Simulationsmodelle," FiFo Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge 05-1, University of Cologne, FiFo Institute for Public Economics.
    8. Andreas PEICHL, "undated". "The Benefits of Linking CGE and Microsimulation Models - Evidence from a Flat Tax analysis," EcoMod2008 23800106, EcoMod.
    9. Sang‐Wook (Stanley) Cho & Julian P. Diaz, 2011. "The Welfare Impact Of Trade Liberalization," Economic Inquiry, Western Economic Association International, vol. 49(2), pages 379-397, April.
    10. Rodrigues, Renato & Linares, Pedro & Gómez-Plana, Antonio G., 2011. "A CGE Assessment of the Impacts on Electricity Production and CO2 Emissions of a Residential Demand Response Program in Spain/Impacto sobre la producción eléctrica y emisiones de CO2 de un programa de," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 29, pages 665(36.)-66, Agosto.
    11. Cardenete Flores, M.A & Llop Llop, M., 2005. "Modelos multisectoriales de equilibrio general aplicado en España: Una revisión/Multisectorial Applied General Equilibrium Models in Spain: a Review," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 23, pages 385-404, Agosto.
    12. Sang-Wook (Stanley) Cho & Juliàn P. Dìaz, 2014. "Accounting for Skill Premium Patterns during the EU Accession: Productivity or Trade?," Discussion Papers 2014-14, School of Economics, The University of New South Wales.
    13. Tae-Jeong Kim & Geoffrey J. D. Hewings, 2013. "Inter-regional endogenous growth under the impacts of demographic changes," Applied Economics, Taylor & Francis Journals, vol. 45(24), pages 3431-3449, August.
    14. repec:taf:rjapxx:v:19:y:2014:i:2:p:205-229 is not listed on IDEAS
    15. Dario Debowicz, 2016. "A social accounting matrix for Iraq," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 5(1), pages 1-19, December.
    16. Hidayat Amir & Ferry Irawan & Djoni Hartono & Anda Nugroho, 2015. "The Development of Fiscal Social Accounting Matrix for Indonesia," Working Papers in Economics and Business 201506, Faculty of Economics and Business, University of Indonesia, revised Oct 2015.

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