Social Accounting Matrices, National Accounts, and

the Circular Flow of Income

IFPRI and University of Cape TownCourse on Quantitative Multi-sector

Policy AnalysisJuly 2001

Circular Flow of IncomeFactor Factor

MarketsMarkets WagesWages& Rents & Rents

ProducersProducers

Product Product MarketsMarketsSalesSales

Revenues Revenues ImportsImports

ExportsExportsRest of the Rest of the

WorldWorld

HouseholdsHouseholds GovernmentGovernment Saving/INVSaving/INV

Domestic Private SavingsDomestic Private Savings

FactorFactorCosts Costs Gov. SavingsGov. Savings

TaxesTaxesDemand for Demand for IntermediateIntermediate

Inputs Inputs

PrivatePrivateConsumption Consumption

GovernmentGovernmentExpenditureExpenditure

Investment Investment DemandDemand

Foreign SavingsForeign Savings

Demand for Final GoodsDemand for Final Goods

TransfersTransfers

Economic and Productive Activities

Non-economic And Non-productive

Non-economicBut productive

EconomicBut Non-Productive

Economic andProductive

NonNon--productive

EconomicEconomic

ActivitiesActivities ProductiveProductiveproductive

NonNon--economiceconomic

Macroeconomic SAM

MWrldSFSGSHCap

THTXGovtYHshld

ZGCComEDAct

WrldCapGovHshldComAct

Macroeconomic Balances

ZGCEMXEDXGDPZGCMD

++=−++==++=+

)(.3.2 1.

GDPXEDTY X ==+=+.4HH STCY ++=.5

GHX SGTT +=+.6

FGH SSSZ ++=.7FSEM +=.8

A National SNA SAMExpenditures

Receipts Activity Factors Institutions WorldCommodity

Activity Total sales

Intermediateinputs

Commodity Final demand Exports

Factors Value added

Factorincome

Institutions Inflows

World Imports

Totals Total costs Total supply Total factorincome

Domesticincome

ForeignExchangeinflow

Indirect taxesand tariffs

TransfersAnd taxes

Indirect taxes

Leontief Input-Output Table

Agric

Mfg

Svc Total

in-termed

Con-

sump- tion

Total Out-put

Price

Agriculture

25

20

0

45

55

100

$2.00

Manufacturing

14

6

6

26

30

56

$5.00 Services

0

0

0

0

30

30

$3.00

Labor

60

80

20

160

$1.00

Capital

20

130

40

190

$1.00 Units: Agriculture: bushels of wheat Manufacturing: tons of cloth Services: man hours

Leontief Input-Output Tableas a Social Accounting Matrix

Expenditures:

Receipts: Agric

Mfg

Svc

Labor

Capital

Hshld

Total

Agriculture

50

40

0

110

200

Manufacturing

70

30

30

150

280 Services

0

0

0

90

90

Labor

60

80

20

160

Capital

20

130

40

190 Household

160

190

350

Total

200

280

90

160

190

350

Social Accounting Matrix

ACT COMM FACT HHLD ACT COMM FACT HHLD GOV ROW CAP GOV ROW CAP TOTALTOTAL

ACTACTCOMMCOMM

FACTFACT

HHLDHHLD

GOVGOV

ROWROW

CAP ACCCAP ACC

TOTALTOTAL

DomesticDomesticSalesSales

IntermInterm..

VAVA

IndirectIndirectTaxesTaxes

ReceiptsReceipts

PaymentsPayments

TotalTotalInputInput

Expend.Expend.

ExportsExports

ImportsImports

TariffsTariffs

PrivPriv. Cons.. Cons.

IncomeIncomeAllocationAllocation RemittRemitt..

GOV Exp.GOV Exp.

DirectDirectTaxesTaxes

PrivatePrivateSavingsSavings

GOVGOVSavingsSavings

ForeignForeignSavingsSavings

INVINV

ExportExportSubsidiesSubsidies

Gross Gross Output SalesOutput Sales

AbsorptionAbsorption

Value ofValue ofSupplySupply

of Goodsof Goods

HouseholdHouseholdIncomeIncome

Factor IncomeFactor Income

FactorFactorIncomeIncometo to HhldHhld

HouseholdHouseholdOutlaysOutlays

GOVGOVOutlaysOutlays

GOVGOVRevenueRevenue

ForeignForeignExchangeExchangeEarningsEarnings

Foreign Foreign ExchExchSavingsSavings

Tot. SavingsTot. Savings

TotalTotalINVINV

TransfersTransfers

Macroeconomic Balances

F

FGH

GHX

HH

X

SEMSSSZSGTTSTCY

GDPXEDTYZGCEMX

EDXGDPZGCMD

+=++=+=+++=

==+=+++=−+

+==++=+

8. 7. 6. 5. 4.

)( 3. 2. 1.