This page provides a "scalar" model of a small open economy provided which can be compared a given social accounting matrix:

A "vector" version of the model with an application to the economic analysis of alternative aid packages can be found here.


$MODEL:SOE

$SECTORS:
	Y.AGR		! Domestic production - AGR
	Y.IND		! Domestic production - IND
	Y.SER		! Domestic production - SER
	A.AGR		! Armington aggregate  - AGR
	A.IND		! Armington aggregate  - IND
	A.SER		! Armington aggregate  - SER
	C.RURAL		! Household consumption - RURAL
	C.URBAN		! Household consumption - URBAN
	INVEST		! Investment

$COMMODITIES:
	PD.AGR		! Domestic output price - AGR
	PD.IND		! Domestic output price - IND
	PD.SER		! Domestic output price - SER
	PA.AGR		! Armington aggregate price - AGR
	PA.IND		! Armington aggregate price - IND
	PA.SER		! Armington aggregate price - SER
	PC.RURAL	! Consumption price index - RURAL
	PC.URBAN	! Consumption price index - URBAN
	PF.L		! Factor price - LABOR
	PF.N		! Factor price - LAND
	PF.K		! Factor price - CAPITAL
	PINV		! Unit cost of new capital 
	PFX		! Real exchange rate

$CONSUMERS:
	RA.RURAL	! Income - RURAL households
	RA.URBAN	! Income - URBAN households
	GOVT		! Value of government expenditure
	FDI		! Level of foreign investment

*	Production functions combine intermediate inputs
*	with value-added in fixed proportions.  Value-added
*	is a Cobb-Douglas aggregate of primary factors (labor,
*	land and capital -- land only enters sector AGR).

*	Output is produced for sale in the domestic and foreign
*	markets according to a constant elasticity of 
*	transformation.  Production for the export market is
*	subject to a 15% tax in the benchmark, so the reference
*	price of exports is 0.85 = 1-0.15 (Taxes on production
*	outputs are defined on a gross basis, so the benchmark
*	taxes decrease the reference price of output):

*	The export tax rate is computed as 

*	tx = 3110/(3110+12301+2395+3326)

*	The FOB export value for AGR, gross of tax is 14424.
*	This is computed as 12301/(1-tx).

$PROD:Y.AGR	S:0 T:4	VA: 1
	O:PFX		Q: 14424 P:0.85 A:GOVT T:0.15
	O:PD.AGR	Q: 15705
	I:PA.AGR	Q: 2163
	I:PA.IND	Q: 2608
	I:PA.SER	Q: 5278
	I:PF.L		Q: 9594	VA:
	I:PF.N		Q: 5419	VA:
	I:PF.K		Q: 2945	VA:


$PROD:Y.IND	T: 4	VA: 1
	O:PFX		Q: 2808	P:0.85	A:GOVT	T:0.15
	O:PD.IND	Q: 33526
	I:PA.AGR	Q: 8852
	I:PA.IND	Q: 12467
	I:PA.SER	Q: 4625
	I:PF.L		Q: 3857	VA:
	I:PF.K		Q: 6121	VA:


$PROD:Y.SER	T: 4	VA: 1
	O:PFX		Q: 3900	P:0.85	A:GOVT	T:0.15
	O:PD.SER	Q: 27396
	I:PA.AGR	Q: 117
	I:PA.IND	Q: 1894
	I:PA.SER	Q: 6655
	I:PF.L		Q: 14335	VA:
	I:PF.K		Q: 7721	VA:

*	Armington aggregations of domestic and foreign
*	goods.  Imports are represented as a demand for 
*	foreign exchange.  Benchmark tariff rates of 18% for
*	agricultural goods, 25% for industrial goods and
*	14% for services.  The reference price of imports
*	reflects these tariffs (taxes on inputs are defined
*	on a net basis, so the tax increases the reference
*	input price):

*	The import tariff rate for AGR is computed as 
*	335/1862.

$PROD:A.AGR	S:2
	O:PA.AGR	Q: 17903
	I:PD.AGR	Q: 15705
	I:PFX		Q: 1862  P: 1.18	A:GOVT	T:0.18

*	The import tariff rate for IND is computed as 
*	3898/15607

$PROD:A.IND	S:2
	O:PA.IND	Q: 53031
	I:PD.IND	Q: 33526
	I:PFX		Q: 15607	P: 1.25	A:GOVT	T:0.25

*	The import tariff rate for SER is computed as 
*	856/6274.

$PROD:A.SER	S:2
	O:PA.SER	Q: 34526
	I:PD.SER	Q: 27396
	I:PFX		Q: 6274		P: 1.14  A:GOVT	T:0.14

*	Investment combines domestic goods to produce new 
*	vintage capital in the PINV market.  There is a 
*	60% tax on this activity (representing the value of
*	4700 in SAM(14,13).  In spite of the benchmark tax
*	we can omit a reference price because there is only a 
*	single output -- reference prices are used to define 
*	the marginal rates of substitution or transformation,
*	and therefore are required only when there are multiple
*	inputs or outputs.

*	The output tax rate for INVEST is computed on a 
*	gross basis as 4700/7262:

$PROD:INVEST
	O:PINV		Q: 7262	A:GOVT	T:0.6
	I:PA.AGR	Q: 373
	I:PA.IND	Q: 2189

*	Cobb-Douglas utility function:

$PROD:C.RURAL	S:1
	O:PC.RURAL	Q: 24847
	I:PA.AGR	Q: 4300
	I:PA.IND	Q: 15350
	I:PA.SER	Q: 5197

$PROD:C.URBAN	S:1
	O:PC.URBAN	Q: 21494
	I:PA.AGR	Q: 1864
	I:PA.IND	Q: 11151
	I:PA.SER	Q: 8478

$DEMAND:RA.RURAL
	D:PC.RURAL
	E:PINV		Q:-13

*	The following endowment represents transfers
*	from the government less income tax payments:

	E:PC.RURAL	Q:(1072-230)

*	Primary factor endowments:

	E:PF.L		Q: 19698
	E:PF.N		Q: 3082
	E:PF.K		Q: 1239

$DEMAND:RA.URBAN
	D:PC.URBAN
	E:PINV		Q:-196

*	The following endowment represents transfers
*	from the government less income tax payments:

	E:PC.URBAN	Q:(513-1292)

*	Primary factor endowments:

	E:PF.L		Q: 7599
	E:PF.N		Q: 2337
	E:PF.K		Q: 12533

$DEMAND:GOVT
	D:PA.AGR	Q: 234
	D:PA.IND	Q: 7372
	D:PA.SER	Q: 4292

*	These entries correspond to income tax receipts
*	less transfers for each of the households:

	E:PC.RURAL	Q:(230-1072)
	E:PC.URBAN	Q:(1292-513)

*	Government investment demand represents government
*	savings and depreciation:

	E:PINV		Q:(-2953-136)

*	Government "labor endowment" is a lump-sum tax
*	on wage income -- if this were a larger number, it 
*	might be more appropriate to represent it as a 
*	distortionary tax:

	E:PF.L		Q: 489

*	Government "capital endowment" represents a lump-sum
*	tax on capital income and depreciation:
*	
	E:PF.K		Q:(1527+136)

$DEMAND:FDI
	E:PFX		Q: (3964-1353)
	E:PF.K		Q:1353
	D:PINV		Q:3964