Page 36 - Azerbaijan State University of Economics
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Yadulla Hasanli, Gunay Rahimli: Assessment of The Multiplicative Effects of The Mining and
Manufacturing Sectors nn Azerbaijan
SAMs are compiled for two reasons: first, they present an all-inclusive and easily
comprehensible picture of the current state of the economy; second, they serve as the
industry standard database for economy modellers, providing information for
economic models (such as the more detailed Computable General Equilibrium or
multi-sectorial linear models).
Table 2: Social Accounting Matrix
Source: (Antonopoulos R., Kim K., 2008)
Multiplier models based on SAM can be formulated as follows: column coefficients
are calculated as in input-output tables. The matrix A is then obtained by dividing
each column element of this matrix by the column sum (Y) from the T SAM matrix.
It is evident that this will satisfy the following equality:
T=AY (4)
We can construct the following equation for each line:
Y=AY+X (5)
From here we can get:
Y = ( İ − A) −1 X = M a X (6)
Here, M is the multiplier matrix. When the matrix A is fixed, M will also be fixed,
a
a
and then equation (6) determines the equilibrium value of y corresponding to any
change in X (Defourny and Thorbecke, 1984). This formula can be used to calculate
the amount that changes in any one of the exogenous accounts that affect Y.
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