2-National Accounts and SAMS_2014

2-National Accounts and SAMS_2014 - National Accounting and...

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National Accounting and Social Accounting Matrices L Edwards Drawing from R. Davies and D. Van Seventer
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Aims and Overview Aim: review main data used in Impact Analysis models Outline What is Impact Analysis? Circular Flow of Income Accounting and National Income Accounts Social Accounting Matrices Exercises Reading: Breisinger et al. (ch 1 & 2), ch 10 Sadoulet and de Janvry, Round (2003b)
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Recap Question What was the economic impact of the World Cup? Ever heard of the statement: X number of direct jobs created, but nX indirect jobs were created” Think of the linkages 3
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What is impact analysis? Empirical estimate of consequences of an exogenous change 7 Try to measure, not theorise Try to measure, not theorise Comparing one state of the economy to another; not forecasting Comparing one state of the economy to another; not forecasting Could be policy shock (decided by government) or other shocks (over which we have no control; e.g. foreigners’ behaviour, weather etc.) Could be policy shock (decided by government) or other shocks (over which we have no control; e.g. foreigners’ behaviour, weather etc.)
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“Underlying any economic analysis there is a set of economic accounts” (Dervis et al., 1982) In modelling we are particularly interested in: What are the economic institutions or ‘actors’ that are included? What are the markets that are explicitly or implicitly included? What are the behavioural or technical assumptions that underlie the accounts? 8 Impact analysis
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Economic accounting: the basics View economy as consisting of various actors or agents Actors interact and transactions take place Transactions are associated with a flow of (financial) resources (price times quantity) Impact analyses make use of information on resource flows to understand relationships between agents Who are these so-called ‘agents’? What types of transactions do they engage in? 9
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Firms Product Markets Factor Markets Rest of the World Households Government Saving/INV Factor Costs Wages & Rents Intermediate Inputs Sales Revenues Private Consumption Taxes Domestic Private Savings Government Expenditure Gov. Savings Investment Expenditure Import Payments Export Receipts Foreign Savings Domestic Demand for Final Goods Transfers Circular Flow of Income Leakages or Withdrawals Injections - Budget Deficit “Absorption” - Current Account Balance
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Intermediate purchases from B 10 Intermediate Sales to B 15 Final Sales to Households 15 Investment Goods to B 5 Wages 5 Profits 20 Total Costs of Production 35 Total Value of Sales 35 FIRM A INCOME AND EXPENDITURE ACCOUNT Intermediate purchases from A 15 Intermediate Sales to A 10 Wages 10 Profits 20 Total Costs of Production 45 Final Sales to Households 25 Investment Goods to A 10 Total Value of Sales 45 Investment Goods from B 10 Investment Goods from A 5 CAPITAL ACCOUNT CAPITAL ACCOUNT CAPITAL ACCOUNT Purchases from Firm A 15 Purchases from Firm B 25 Savings 15 Savings 15 Total Uses of Income 55
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