LE IA Day3_From IO to SAM_2014

# LE IA Day3_From IO to SAM_2014 - From IO to SAM...

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• beatricemutindi94
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From IO to SAM: Supply- and-Use Structure Chapter 3 & 4 Breisinger et al. (2009) United Nations (1999), ch 1 & ch 12. Warning: I find the IFPRI (Breisinger et al. 2009) equations of the SAM model very confusing. The equations, however, are explicit about how the commodity account is linked to the activity account 1

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From IO to SAM: Supply-and-Use Structure (1) Replacing sector x sector input-output structure with a commodity x activity structure Modelling process essentially same as IO Used within an IO framework, final demand ( F ) is still exogenous, while endogenous accounts are now a mix of commodities (c) and activities (a) Why is this useful? You don’t need the same number of activities and commodities Possible to incorporate multi-product activities 2 2
From IO to SAM: Supply-and-Use Structure – Households Exogenous (2) 3 AGRIC MANUF F X AGRIC Z 11 Z 12 f 1 x 1 MANUF Z 21 Z 22 f 2 x 2 Main difference is that intermediate matrix is split into a Supply and Use table 3

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From IO to SAM: Supply-and-Use Structure (3) Circular flow in SU model AAgric AManuf CAgric CManuf HH Other Total AAgric 279 0 279 AManuf 0 394 394 CAgric 84 55 79 71 289 CManuf 50 99 257 152 558 Pay to Fact 145 240 86 471 Other Pay 10 164 135 3 312 Total Cost 279 394 289 558 471 312 Assume that exports of agricultural commodities rise. What is the flow of impacts? 4
5 Recap: From IO table to IO model Recall, how we created the IO model How much output X is required to satisfy intermediate input demand and final demand? Represent this as system of equations AGR IC M ANU F SERV X 5 6 4 1 =10 1 =25 M ANU F 10 2 4 F 2 =5 X 2 =21 SERV 2 6 4 F 3 =6 X 3 =18 VA 8 7 6 21 To ta l 25 21 18 21 v 13 = 6 /18=0 .33 v 12 = 7 /21=0 .33 v 11 = 8 /25=0 .32 VA a 33 = 4 /18=0 .22 a 32 = 6 /21=0 .29 a 31 = 2 /25=0 .08 SERV AGR IC M ANU F SERV AGR IC a 11 = 5 /25=0 .2 a 12 = 6 /21=0 .29 a 13 = 4 /18=0 .22 M ANU F a 21 = 10 /25=0 .4 a 22 = 2 /21=0 .1 a 23 = 4 /18=0 .22 To ta l 1 1 1 Ca lcu la te IO coeffi c ien t m a tr ix O r ig ina l IO tab le : All Sectors Or 1 1 3 2 1 22 . 0 29 . 0 2 . 0 X F X X X 2 2 3 2 1 22 . 0 1 . 0 4 . 0 X F X X X 3 3 3 2 1 22 . 0 29 . 0 08 . 0 X F X X X 3 2 1 3 2 1 3 2 1 22 . 0 29 . 0 08 . 0 22 . 0 1 . 0 4 . 0 22 . 0 29 . 0 2 . 0 X X X F F F X X X 3 2 1 1 3 2 1 ) 22 . 0 1 ( 29 . 0 08 . 0 22 . 0 ) 1 . 0 1 ( 40 . 0 22 . 0 29 . 0 ) 2 . 0 1 ( F F F X X X

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From IO to SAM: Model equations (1) We follow same procedure in constructing SAM model Going to ask: How much output (X) or commodity supply (C) is required to supply demand from different activities? First need to establish the functional relationship between Activities (production) and intermediate input demand And sources of products in Commodity account 6
From IO to SAM: Model equations (3) – First Derive Direct Coefficient Matrix AAgric AManuf CAgric CManuf HH Other Total Aagric 279 0 279 AManuf 0 394 394 CAgric 84 55 79 71 289 CManuf 50 99 257 152 558 Pay to Fact 145 240 86 471

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