 Prices, Social Accounts and Economic ModelsScott McDonald No 331620, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project Abstract: Despite the fact that SAMs are widely used as the databases for CGE models there remains some confusion over the relationship between the two; in particular the implications and meaning of the 'law of one price’ appear to be poorly understood. This has two clear, and arguably, worrying implications. First, a deficiency in understanding the accounting relationships in a SAM means that when compiling a SAM it is likel that the structural relationships in the economy may be misrepresented. And second, any misunderstanding of the behavioural relationships in a CGE model, which can be defined as theory with numbers, is highly likely to lead to flawed interpretations of the results from such models. The discussion in this paper revisits the issues of the role of a price system in social accounts and then demonstrates how the resultant price definitions require that all whole economy models that satisfy the conditions of being both complete and consistent MUST obey the 'law of one price’. The relevance of the 'law’ to the characteristics of certain features of CGE models is demonstrated as is its relevance to the compilation of SAMs. Keywords: Demand and Price Analysis; Research Methods/Statistical Methods (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331620 Access Statistics for this paper More papers in Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.