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SAMs
Savings
Poverty and Development
Bill Gibson
UVM Fall 2010
Bill Gibson
University of Vermont
SAMs
Savings
Social Accounting Matrices
SAMs are always nominal, measured in dollars (not physical
units)
Bill Gibson
University of Vermont
SAMs
Savings
Social Accounting Matrices
SAMs are always nominal, measured in dollars (not physical
units)
The SAM for the base year is therefore both real and nominal
Bill Gibson
University of Vermont
SAMs
Savings
Social Accounting Matrices
SAMs are always nominal, measured in dollars (not physical
units)
The SAM for the base year is therefore both real and nominal
SAMs have at most 4 agents: firms, households, government
and foreign
Bill Gibson
University of Vermont
SAMs
Savings
Social Accounting Matrices
SAMs are always nominal, measured in dollars (not physical
units)
The SAM for the base year is therefore both real and nominal
SAMs have at most 4 agents: firms, households, government
and foreign
Each agent has a row and column
Bill Gibson
University of Vermont
SAMs
Savings
Social Accounting Matrices
SAMs are always nominal, measured in dollars (not physical
units)
The SAM for the base year is therefore both real and nominal
SAMs have at most 4 agents: firms, households, government
and foreign
Each agent has a row and column
When income (rows) = expenditure (columns) for all agents
of the SAM, then total savings is equal to total investment
Bill Gibson
University of Vermont
SAMs
Savings
Social Accounting Matrices
SAMs are always nominal, measured in dollars (not physical
units)
The SAM for the base year is therefore both real and nominal
SAMs have at most 4 agents: firms, households, government
and foreign
Each agent has a row and column
When income (rows) = expenditure (columns) for all agents
of the SAM, then total savings is equal to total investment
When solving a SAM problem, make sure that total
investment is equal to total savings first
Bill Gibson
University of Vermont
SAMs
Savings
Social Accounting Matrices
SAMs are always nominal, measured in dollars (not physical
units)
The SAM for the base year is therefore both real and nominal
SAMs have at most 4 agents: firms, households, government
and foreign
Each agent has a row and column
When income (rows) = expenditure (columns) for all agents
of the SAM, then total savings is equal to total investment
When solving a SAM problem, make sure that total
investment is equal to total savings first
Note that savings is included in expenditure!
Bill Gibson
University of Vermont
SAMs
Savings
SAMs
Gross value of production is the row sum for the firms
Bill Gibson
University of Vermont
SAMs
Savings
SAMs
Gross value of production is the row sum for the firms
The GDP is GVP less intermediate goods, plus government
wages
Bill Gibson
University of Vermont
SAMs
Savings
SAMs
Gross value of production is the row sum for the firms
The GDP is GVP less intermediate goods, plus government
wages
PI is sum of household row/column
Bill Gibson
University of Vermont
SAMs
Savings
SAMs
Gross value of production is the row sum for the firms
The GDP is GVP less intermediate goods, plus government
wages
PI is sum of household row/column
Government deficit is negative of government savings
Bill Gibson
University of Vermont
SAMs
Savings
SAMs
Gross value of production is the row sum for the firms
The GDP is GVP less intermediate goods, plus government
wages
PI is sum of household row/column
Government deficit is negative of government savings
The foreign deficit is foreign savings (total imports less total
exports)
Bill Gibson
University of Vermont
SAMs
Savings
SAMs
Gross value of production is the row sum for the firms
The GDP is GVP less intermediate goods, plus government
wages
PI is sum of household row/column
Government deficit is negative of government savings
The foreign deficit is foreign savings (total imports less total
exports)
SAM balanced when income is equal to expenditure for all
agents
Bill Gibson
University of Vermont
SAMs
Savings
SAMs
Gross value of production is the row sum for the firms
The GDP is GVP less intermediate goods, plus government
wages
PI is sum of household row/column
Government deficit is negative of government savings
The foreign deficit is foreign savings (total imports less total
exports)
SAM balanced when income is equal to expenditure for all
agents
sum of savings equal investment
Bill Gibson
University of Vermont
SAMs
Savings
A simple SAM
2-agent SAM
Firms
HH
Savings
Total
check S-I
GDP
VA
error
Firms
77
223
300
Households
159
Invest
64
64
223
64
0
223
223
0
Bill Gibson
University of Vermont
Total
300
223
64
error
0SAMs
Savings
A 2-agent SAM with wages and profits
2-agent SAM
Firms
HH
Labor
Capital
Savings
Total
check S-I
GDP
VA
error
Firms
HH
80
Invest
20
20
100
20
100
60
40
100
0
100
100
0
Bill Gibson
University of Vermont
Total
100
100
60
40
20
SAMs
Savings
3-agent SAM
3-agent SAM
Firms
HH
Labor
Capital
Savings
Govt
Total
check S-I
GDP
VA
error
Firms
21
308
185
123
329
HH
198
72
68
338
Invest
44
-28
44
0
338
338
0
Bill Gibson
Govt
66
30
30
University of Vermont
68
Total
329
338
215
123
44
68
SAMs
Savings
4-agent SAM
4-agent SAM
Firms
HH
Labor
Capital
Savings
Taxes
Imports
Total
check S-I
GVP
GDP
VA
Firms
9
304
182
122
313
HH
210
Invest
80
Govt
6
6
4
2
50
Exports
8
62
16
23
62
16
310
80
Bill Gibson
University of Vermont
0
313
308
308
8
Total
313
310
186
124
80
62
16
SAMs
Savings
NIPA-SAM
NIPA-SAM
Firms
HH
Labor
Capital
Transfers
Saving
Depreciation
Retained earnings
Government
Direct tax
Indirect tax
Social Security
Foreign
Total
Firms
HHs
Inv
Gov
Foreign
Total
260
1321
793
528
1042
282
204
281
206
75
462
61
219
182
19
2343
23
555
368
177
114
77
-123
2343
1689
970
642
77
282
206
75
800
399
219
182
305
800
305
101
338
338
286
1689
Bill Gibson
282
University of Vermont
SAMs
Savings
NIPA-SAM
The GDP is
The GNP is
Net national product is
National income is
Personal income is
Personal disposable income is
The government deficit is
The foreign deficit is
Capital stock
Capital stock next period
2260
2241
2035
1816
1689
1351
123
101
6780
6856
VA
private
public
error
2260
2083
177
0
Bill Gibson
University of Vermont
SAMs
Savings
Foreign savings
We call this foreign savings because it is owed to foreigners
since we didn’t pay for all of our imports with exports
Bill Gibson
University of Vermont
SAMs
Savings
Foreign savings
We call this foreign savings because it is owed to foreigners
since we didn’t pay for all of our imports with exports
Foreigners are therefore “saving” in our country
Bill Gibson
University of Vermont
SAMs
Savings
Foreign savings
We call this foreign savings because it is owed to foreigners
since we didn’t pay for all of our imports with exports
Foreigners are therefore “saving” in our country
the sum of firm savings, households saving, government
savings and foreign savings is equal to investment
Bill Gibson
University of Vermont
SAMs
Savings
Foreign savings
We call this foreign savings because it is owed to foreigners
since we didn’t pay for all of our imports with exports
Foreigners are therefore “saving” in our country
the sum of firm savings, households saving, government
savings and foreign savings is equal to investment
The government deficit is the negative of government savings
Bill Gibson
University of Vermont
SAMs
Savings
Foreign savings
We call this foreign savings because it is owed to foreigners
since we didn’t pay for all of our imports with exports
Foreigners are therefore “saving” in our country
the sum of firm savings, households saving, government
savings and foreign savings is equal to investment
The government deficit is the negative of government savings
When firms operate they have some payments that are
contractual, intermediates, wages, indirect taxes, profit taxes,
foreign factor payments
Bill Gibson
University of Vermont
SAMs
Savings
Foreign savings
We call this foreign savings because it is owed to foreigners
since we didn’t pay for all of our imports with exports
Foreigners are therefore “saving” in our country
the sum of firm savings, households saving, government
savings and foreign savings is equal to investment
The government deficit is the negative of government savings
When firms operate they have some payments that are
contractual, intermediates, wages, indirect taxes, profit taxes,
foreign factor payments
Twin towers: foreign and govt deficits related
Bill Gibson
University of Vermont