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GTAP Resource #1510

"Lessons from Exploring the GTAP Data Base as a Global Social Accounting Matrix"
by McDonald, Scott and Karen Thierfelder

In this paper the relationships between the GTAP database and a global social accounting matrix (SAM) are explored. The analyses demonstrate that, with one apparent exception, the GTAP database can be easily reorganised into a global SAM that is a truncated form of the SAM described in the United Nations System of National Accounts (SNA).
The representation of the GTAP database as a global SAM makes it easy to identify the relationships between national accounting data and the GTAP database, this is particularly so for the relationships between national and GTAP input-output tables and between consolidated national (T) accounts and the implicit national accounts in the GTAP database. The implications of these relationships for the GTAP database are discussed.
The global SAM highlights the nature of the price relations that are built into the GTAP database and model. Using the accounting relationships from the global SAM a transparent, intuitive and simple representation of the price definitions in the GTAP model is developed. It is then shown that the price relations in the GTAP database are consistent with those in an SNA SAM with one exception; specifically purchases by sectors and institutions within a region are valued at producer/market pries rather than purchaser/agent prices. This appears to imply that the GTAP database does not conform to the ‘law of one price’ in a SAM; namely that all purchasers of each ‘separate’ commodity pay the same (purchaser) price. However, it is shown that the GTAP model does in fact embody the ‘law of one price’ since it contains the (implicit) assumption that commodities are differentiated both by commodity and purchaser. An alternative treatment of consumption taxes is used to illustrate some of the implications of the price relationships in the GTAP database.
The global SAM is used to further explore the nature of transactions between regions. A version of the global SAM is developed to explore some of the implications of the current treatment of inter-regional transactions; these explorations demonstrate that for certain policy scenarios it may be desirable to augment the GTAP database. Circumstances under which such data augmentation may be relevant are identified.
The second last section of the paper demonstrates that the regional household formulation of the global SAM is a reduced form of a more general SAM structure. It is demonstrated that it is easier for users to augment the GTAP database using a more general SAM structure, and that subsequent conversion of the revised database to the reduced form is simple. A comparison between the databases in a general SAM form and a reduced form is used to explore some of the implications for the GTAP model of using the concept of a regional household.
The concluding section discusses some of the ways in which the identified relationships between the GTAP database and national accounts can be exploited to further the development of the GTAP database.

Resource Details (Export Citation) GTAP Keywords
Category: 2004 Conference Paper
Status: Published
By/In: Presented at the 7th Annual Conference on Global Economic Analysis, Washington DC, USA
Date: 2004
Created: McDonald, S. (5/1/2004)
Updated: McDonald, S. (5/1/2004)
Visits: 5,142
No keywords have been specified.

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