A Matrix Approach to the Socioeconomic Activity of a Country

Theoretical Economics Letters, 8 (2018), pp.1083-1135

53 Pages Posted: 29 Nov 2018

See all articles by Susana Santos

Susana Santos

Universidade de Lisboa - ISEG (Lisbon School of Economics and Management), UECE (Research Unit on Complexity and Economics), REM (Research in Economics and Mathematics) & DE (Department of Economics); Universidade de Lisboa - ISEG (Lisbon School of Economics and Management), UECE (Research Unit on Complexity and Economics), REM (Research in Economics and Mathematics) & DE (Department of Economics)

Date Written: April 19, 2018

Abstract

A Social Accounting Matrix (SAM) is presented as a tool to study the socioeconomic activity of a country. This activity involves the monetary or nominal flows that are measured by the National Accounts, as well as production (organized in factors, industries and goods and services) and institutions (organized in households, general government, non-financial and financial corporations, non-profit institutions serving households, and rest of the world).In order to contribute to the definition of a methodology that can improve the knowledge of the different aspects of this activity, the potentialities of a SAM for its reading and interpreting are explored, as well as for carrying out experiments regarding its functioning.Through a SAM-based approach, how to construct more or less complex networks of linkages of the above-mentioned flows is shown, from which structural features can be evidenced and the associated multiplier effects studied. Following an application to Portugal, it is shown that a numerical version of a SAM, enables an empirical description of the origin, use, and distribution of income, whereas, an algebraic version of a SAM allows one to carry out, for example, a deeper study of the multiplier effects associated with the institutional distribution of income. The crucial role of the factors of production accounts is identified in this study, namely when they establish the link between the generation and the distribution and use of income. In this process, the important role the complementary details that the Input-Output Matrix (IOM) can add is also identified. Thus, being the generation of income the result of the output of goods and services and the associated costs, on the one hand, an industry by industry IOM can add details regarding domestic and imported intermediate consumption by and between industries and, on the other hand, a product by product IOM can add details regarding the domestic and imported intermediate consumption of goods and services.

Keywords: Social Accounting Matrix; Input-Output Matrix; National Accounts; Socioeconomic Structure; Income Distribution

JEL Classification: E01; E02; E16; E25; D57

Suggested Citation

Santos, Susana and Santos, Susana, A Matrix Approach to the Socioeconomic Activity of a Country (April 19, 2018). Theoretical Economics Letters, 8 (2018), pp.1083-1135, Available at SSRN: https://ssrn.com/abstract=3278197

Susana Santos (Contact Author)

Universidade de Lisboa - ISEG (Lisbon School of Economics and Management), UECE (Research Unit on Complexity and Economics), REM (Research in Economics and Mathematics) & DE (Department of Economics) ( email )

Rua Miguel Lupi, 20
Lisboa, 1249-078
Portugal

HOME PAGE: https://www.iseg.ulisboa.pt/aquila/homepage/ssantos?locale=en

Universidade de Lisboa - ISEG (Lisbon School of Economics and Management), UECE (Research Unit on Complexity and Economics), REM (Research in Economics and Mathematics) & DE (Department of Economics) ( email )

Rua Miguel Lupi, 20
Lisboa, 1240-078
Portugal
+351 21 392 59 53 (Phone)

HOME PAGE: http:////www.iseg.ulisboa.pt/aquila/homepage/f645

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