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Jean-Marc PHILIPUniversité de la Méditerrannée

FranceEmail (jean-marc.philip@univmed.fr)

Presentation in Skopje

March 2010

  

"Everything should be made as simple as possible, but not simpler." Albert Einstein « Une œuvre où il y a des théories est comme un objet sur lequel on laisse la marque du prix.»  Marcel Proust.(A work with theories is like an objet upon which brand price is left)   « For all interesting questions in economics, the only good answer is: it depends. » Thomas Rutherford

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Data availability issue for building an energy-economic framework ;

Framework of a Social Accounting Matrix elaboration following the business intelligence (BI) approach;

Building the Social Accounting Matrix for Macedonia (2000 and 2004);

Building a Calculable General Equilibrium Model equations for a “green growth” policy in GAMS-MPSGE.

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More and more data available, today data availability is less an issue data management and analysis becomes a problem.

Easier data collection thanks to improved technologies and standardised data collection methodologies (web, email, etc.)

Production of synthetized reports of aggregated data (input-output tables, make and use tables, expenditures and resources, national accounts, consolidated budget, balance of payments, etc.)

How can data originating from heterogeneous environments be collected, aggregated and analyzed ?

Can political deciders easily understand quantitative information provided ?

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SAM represents transfers in values between institutional agents and sectors;

A SAM is a comprehensive, disaggregated, consistent data base that captures the interdependence that exist within a socio-economic system;

The SAM is a coherence tool (e.g. in the SAM the data are organised and viewed in a global and consistent way).

Hence : The SAM is a “decision tool” by itself and may be seen

as the most important “dashboard” for the government. SAM should be updated yearly in order to analyse

transfers’ evolution between agents

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Factor and product markets equilibrium (supply = demand) Budget constraints: for each agent: total income = total

expenditure Macroeconomic Balance: Saving = Investment Assets = Liabilities.

SAM is generally built by institution (consultant) elaborating the CGE model.

Data are collected essentially from :- the main macro-economic and financial indicators- the Supply and Use tables (transformation from “accounting view” to “economic view”)- the input-Output tables for the different sectors

SAM should be built by all concerned institutions (MOF, Central Bank, Ministry of Economy, …) and compiled by the National (or regional) institute of Statistics.

The main issue for building a SAM is data extraction, transformation and aggregation (top-down vs bottom-up approach)

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ETL is a class of program that manages the transactions to be done between the original tables and the Data Warehouse

The Data Warehouse is updated thanks to the ETL process

BI tools (such as SSIS, SSAS, SSRS included into SQL 2010) can be used,

GAMS is also a good – and free – ETL package.

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◦ Following the BI approach, the SAM for Macedonia was built in 2007 according to the BI approach (data preparation and ETL)

◦ Data preparation is generally done using the “pivot table” Excel feature (it is not always necessary).

◦ The SAM directly reads its input data from the Input-Table 2000 (available in Excel Matrix format);

◦ Extraction-Transformation and Loading (ETL) was done in GAMS.

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A “standard” CGE model asserts that in a free market, production and demand of goods depend on the market price;

CGE models were initially used by the World Bank for fiscal analysis;

Presently CGE models are widely used for trade analysis (impact of trade agreements, EPA, trade liberalisation, WTO accession, etc.) and energy policies (e.g. energy or carbon taxation).

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More generally, CGE models are more and more used for building « what if » scenarios.

CGE models may also be used for economic forecasting (as they can produce a consistent macro-economic framework for the country)

CGE modeling captures a large panel of economic policies and a basic structure can be adapted for different purposes.

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MPSGE is a language/syntax invented by Thomas Rutherford which enables to build CGE models without writing equations

MPSGE model is based on the MCP (Mixed Complementary Problem) approach of the Arrow-Debreu general equilibrium model prices are calculated from equilibrium between supply and demand (zero stocks) quantities are calculated from equilibrium between “input” and “output prices” (zero profits)

From a “standard version” the structure a MPSGE CGE model can be easily adapted to better capture economic behavior of a specific country (e.g. CES

functions, price flexibility, taxes etc.) MPSGE is available in GAMS.

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A dynamic Calculable General Equilibrium (CGE) sectoral model in GAMS/MPSGE with:

3 production factors (labor, capital and energy) 6 sectors with energy and non-energy branches Two markets for factors of production : imports

and domestic (different prices) Various economic agents (households,

government, rest of the world) 6 products : same as sectors (possibility to

distinguish sectors and products up to Input-Output table disaggregation).

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: ETL process to build the SAM from Input-

Output tables and additional tables using GAMS programming;

CGE model built in GAMS/MPSGE (robustness, easy handling, no algebraic equations);

Elaboration of “what if” scenarios within GAMS Energy policy simulations can be done

through the GAMS IDE interface (GAMS can be also launched from Excel or user interface);

Model results are sent into Excel file, Access or many other DBMS;

Results can be viewed from Excel or any other spreadsheet (such as QlickView)

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5.Acc Total Lab Ene Cap Hou Gov TaxD TaxC TaxM Row Agr InMn InCo InEn SvMa SvNm Acc

1.Fp Lab 2 702 20 070 4 875 2 950 17 478 18 083 66 159Ene 1 351 10 035 2 438 1 475 8 739 9 042 33 080Cap 13 311 12 616 3 295 5 951 21 050 3 868 60 091

2.Ag Hou 66 159 33 080 60 091 23 987 183 316Gov 6 616 27 256 575 14 327 48 774TaxD 6 616 6 616TaxC 3 451 13 002 39 1 174 8 408 1 182 27 256TaxM 0 8 1 0 561 5 575Row 11 836 0 11 154 195 036 55 379 2 853 2 026 223 339

4.Pr Agr 19 172 0 5 683 15 239 15 070 28 20 456 414 2 349 58 431InMn 72 234 0 89 196 7 039 61 876 13 487 4 926 22 564 15 463 53 549 340 333InCo 215 0 1 016 634 1 016 10 369 6 2 884 2 287 19 350 37 777InEn 8 805 0 781 1 001 3 966 266 395 1 400 1 185 0 17 799SvMa 46 713 0 20 334 1 994 6 828 2 684 377 27 643 9 446 371 116 390SvNm 13 129 43 021 2 650 554 810 241 145 2 354 1 867 96 64 867

5.Acc Acc 4 597 5 753 65 365 75 715Total 66 159 33 080 60 091 183 316 48 774 6 616 27 256 575 223 339 58 431 340 333 37 777 17 799 116 390 64 867 75 715

1.Fp 2.Ag 3.Se

$MODEL:RECURSIF

$SECTORS:

Y(i,t) ! Output

IT(t) ! Investment

CTH(t) ! Household consumption

CTG(t) ! Government consumption

E(ae,i,t)$E0(ae,i) ! Exports by product and by area

M(ae,i,t)$M0(ae,i) ! Imports by product and by area

Q(i,t) ! Composite goods

MT(i,t)$SUM(ae,M0(ae,i)) ! Imports by product

ET(i,t)$SUM(ae,E0(ae,i)) ! Exports by product

$COMMODITIES:

RK(t) ! Return on capital

PK(t) ! Price of Capital

PL(i,t) ! Wages Rates

PN(t) ! Price of energy

PC(t) ! Index of consumer prices

PG(t) ! Price index for government

PM(ae,i,t)$M0(ae,i) ! Price index of imports by area

PD(i,t) ! Price index for domestic goods

PE(ae,i,t)$E0(ae,i) ! Price index of exports by area

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PMT(i,t)$SUM(ae,M0(ae,i)) ! Index of import prices

PET(i,t)$SUM(ae,E0(ae,i)) ! Export price index

PQ(i,t) ! Price index for composite goods

PFX(t) ! Index of real exchange rate

$CONSUMERS:

HOU(t) ! Private Sector

GOV(t) ! Government

ROW(t) ! Rest of world

$AUXILIARY:

K(t) ! Capital Stock

DTax(ac,t) ! Direct taxes

MK(i,t) ! Rigidity constraint on the composite price

PLF(i,t) ! Rigidity constraint on wages

BOP(t) ! Rigidity constraint on the exchange rate

TRF(t) ! Constraint on transfers from ROW

$PROD:Y(j,t) va:SigmaF(j) t:SigmatZ(j)

O:PET(j,t) Q:(SUM(ae,E0(ae,j)))

O:PD(j,t) Q:D0(j)

I:PL(j,t) Q:F0("lab",j) VA:

I:RK(t) Q:F0("cap",j) VA:

I:PN(t) Q:F0("ene",j) t:taun(j) a:GOV(t)

I:PQ(i,t) Q:CIJ0(i,j)

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$PROD:IT(t) s: sigmaIT

O:PK(t) Q:IT0

I:PQ(i,t) Q:Inv0(i)

$PROD:CTH(t) s: sigmaH

O:PC(t) Q:(SUM(i,C0('Hou',i)-C0_('Hou',i)))

I:PQ(i,t) Q:(C0('Hou',i)-C0_('Hou',i))

$PROD:CTG(t)

O:PG(t) Q:(SUM(i,C0('Gov',i)))

I:PQ(i,t) Q:(C0('Gov',i))

$PROD:ET(i,t)$ET0(i) t:sigmaET(i)

O:PE(ae,i,t) Q:E0(ae,i)

I:PET(i,t) Q:(SUM(ae,E0(ae,i)))

$PROD:MT(j,t)$MT0(j) s:sigmaMT(j)

O:PMT(j,t) Q:(SUM(ae,M0(ae,j)))

I:PM(ae,j,t) Q:M0(ae,j)

$PROD:E(ae,i,t)$E0(ae,i)

O:PFX(t) Q:(E0(ae,i)*Pwe0(ae,i)) a:GOV(t) t:taue(ae,i)

I:PE(ae,i,t) Q:E0(ae,i)

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$PROD:M(ae,j,t)$M0(ae,j)

O:PM(ae,j,t)$M0(ae,j) Q:(M0(ae,j))

I:PFX(t) Q:(Pwm0(ae,j)*M0(ae,j)) a:GOV(t) t:tm(ae,j,t)

$PROD:Q(j,t) s:sigmaQ(j)

O:PQ(j,t) Q:(Q0(j)/(1-tauz(j))) a:GOV(t) t:tz(j,t)

I:PD(j,t) Q:D0(j)

I:PMT(j,t) Q:MT0(j)

$DEMAND:GOV(t)

D:PK(t) Q:(S0('Gov')) P:Pref(t)

E:PG(t) Q:(-SUM(i,C0('Gov',i))*Qref(t))

E:RK(t) Q:(spf("Gov","Cap")) R:K(t)

* Direct Taxes

E:PG(t) Q:(1) R:DTax("Hou",t)

* Transferts

E:PC(t) Q:(SUM(ag,(Trn0(ag,"Gov")-Trn0("Gov",ag)))*Qref(t))

E:PC(t) Q:(1) R:TRF(t)

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$DEMAND:HOU(t)

D:PC(t) Q:(SUM(i,C0('Hou',i)-C0_('Hou',i))) P:Pref(t)

E:PQ(i,t) Q:(-C0_('Hou',i)*Qref(t))

D:PK(t) Q:((S0('Hou'))) P:Pref(t)

E:RK(t) Q:(spf("Hou","Cap")) R:K(t)

E:PN(t) Q:(spf("Hou","Ene")*SUM(i,F0('Ene',i))*Qref(t))

E:PL(i,t) Q:(spf("Hou","Lab")*F0('Lab',i)*Qref(t)) R:PLF(i,t) R:MK(i,t)

* Direct Taxes

E:PG(t) Q:(-1) R:DTax("Hou",t)

* Transferts

E:PC(t) Q:(SUM(ag,(Trn0(ag,"Hou")-Trn0("Hou",ag)))*Qref(t))

$DEMAND:ROW(t)

D:PK(t) Q:(SUM(ae,S0(ae))) P:Pref(t)

E:PL(i,t) Q:(SUM(ae,spf(ae,"Lab")*F0('Lab',i)*Qref(t))) R:PLF(i,t) R:MK(i,t)

E:RK(t) Q:(SUM(ae,spf(ae,"Cap"))) R:K(t)

E:PFX(t) Q:(-SUM(ae,B0(ae))*Qref(t)) R:BOP(t)

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* Transferts

E:PC(t) Q:(SUM(ag,SUM(ae,(Trn0(ag,ae)-Trn0(ae,ag))))*Qref(t))

E:PC(t) Q:(-1) R:TRF(t)

$CONSTRAINT:DTax(ac,t)

DTax(ac,t) =E= Taud(ac)*(SUM(f,SAM(ac,f))*CTH(t)) ;

$CONSTRAINT:K(t)

K(t) =E= SUM(i,F0('cap',i))$T1(t) +(1-delta)*K(t-1) + (IT(t-1))*IT0*(r+delta) ;

* Contrainsts on model structure

$CONSTRAINT:BOP(t)

PFX(t) =E= PRef(t) ;

$CONSTRAINT:MK(i,t)

PQ(i,t) =E= PRef(t) ;

$CONSTRAINT:PLF(i,t)

PL(i,t) =E= PRef(t) ;

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