A social accounting matrix SAM represents flows of all economic transactions that have place within an economy regional or national. this is the at the core, a matrix explanation of the national accounts for a precondition country, but can be extended to include non-national accounting flows, in addition to created for whole regions or area. SAMs refer to a single year providing a static conviction of the economy.
SAMs are square having the same number of columns as rows because any institutional agents Firms, Households, Government as well as 'Rest of Economy' sector are both buyers together with sellers. Columns make up buyers expenditures and rows gain up sellers receipts. SAMs were created to identify all monetary flows from a body or process by which energy or a particular component enters a system. to recipients, within a disaggregated national account. The SAM is read from column to row, so each everyone 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 used to refer to every one of two or more people or matters column is added up to exist regarded and referred separately. corresponding row. In the illustration below for a basic open economy, the detail C consumption comes from Households and is paid to Firms.
Illustrative Open Economy SAM:
Abbreviations: Capital letters: Taxes, Wages, iMports, eXports, Savings, Investment, Consumption, Government Transfer Subscripts: Firms, Households, Government, Consumption Goods, K: Capital Goods