The SAM
SAMs are square (columns equal rows) in the sense that all institutional agents (Firms,Households, Government and 'Rest of Economy' sector) are both buyers and sellers. Columns represent buyers (expenditures) and rows represent sellers (receipts). SAM's were created to identify all monetary flows from sources to recipients, within a disaggregated national account. The SAM is read from column to row, so each entry in the matrix comes from its column heading, going to the row heading. Finally columns and rows are added up, to ensure accounting consistency, and each column is added up to equal each corresponding row. In the illustration below for a basic open economy, the item C (consumption) comes from Households and is paid to Firms.
Illustrative Open Economy SAM:
| Firm | Household | Government | Rest of Economy | Net Investment | Total (Received) | |
|---|---|---|---|---|---|---|
| Firm | C | GF | (X-M)K | I | C+GF+(X-M)K+I | |
| Household | W | GH | (X-M)C | W+GH+(X-M)C | ||
| Government | TF | TH | TF+TH | |||
| Rest of Economy | (X-M)K | (X-M)C | (X-M)K+(X-M)C | |||
| Net Investment | SH | SG | SH+SG | |||
| Total (Expended) | W+TF+(X-M)K | C+TH+(X-M)C+SH | GF+GH+SG | (X-M)C+(X-M)K | I |
Abbreviations: Capital letters: Taxes, Wages, iMports, eXports, Savings, Investment, Consumption, Government Transfer Subscripts: Firms, Households, Government, Consumption Goods, K: Capital Goods
Read more about this topic: Social Accounting Matrix
Famous quotes related to the sam:
“When you have shot one bird flying you have shot all birds flying. They are all different and they fly in different ways but the sensation is the same and the last one is as good as the first.”
—Ernest Hemingway (1899–1961)