Published online by Cambridge University Press: 11 December 2020
In this chapter, we describe the two components of the database of a computable general equilibrium (CGE) model. The first is the Social Accounting Matrix (SAM). The SAM database reports the value of all transactions in an economy during a period of time. The data are organized in a logical framework that provides a visual display of the transactions as a circular flow of national income and spending. The SAM’s microeconomic data describe transactions made by each agent in a region’s economy. When aggregated, the SAM’s micro data describe the region’s macro economy. The SAM’s micro data can be used to calculate descriptive statistics on an economy’s structure. We describe three extensions to a SAM: non-diagonal make matrices, domestic trade margins, and multi-region input-output tables. A CGE model database also includes elasticity parameters that describe the responsiveness of producers and consumers to changes in income and relative prices. The role of these parameters in driving model results can be evaluated in a sensitivity analysis.
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