Processing the supply-use table
The supply and use tables
Information about supply and use tables (SUT) is provided elsewhere in this documentation. This page explains how the SUT is processed internally by AMES. The supply and use tables have the following structure:
Supply table
| Total (purchase price) | Margins | Taxes, etc. | Total (basic price) | Sectors | Total (domestic production) | Imports | |
|---|---|---|---|---|---|---|---|
| Products | $\mathbf{q}$ | $\mathbf{m}$ | $\mathbf{T}^d$ | $\left(\mathbf{q}-\mathbf{m}\right)$ | $\mathbf{V}^T$ | $\mathbf{q}^s$ | $\mathbf{M}$ |
| Total | $\mathbf{g}^T$ |
Use table
| Total (purchase price) | Sectors | Total (industrial demand) | Exports | Final domestic demand | Inventory changes | |
|---|---|---|---|---|---|---|
| Products | $\mathbf{q}$ | $\mathbf{U}$ | $\mathbf{q}^d$ | $\mathbf{X}$ | $\left(\mathbf{F} + \mathbf{I}\right)$ | $\Delta\mathbf{B}$ |
| Wages | $\mathbf{W}^T$ | |||||
| Profits | $\mathbf{\Pi}^T$ | |||||
| Total | $\mathbf{g}^T$ |
For the remainder of this section, the notation from the Variables page is used, where an underline indicates an exogenous parameter, while an overline is a dynamic parameter.
Demand coefficients and supply shares
Prices are indices equal to 1 in the initial year. Total output from sector $i$ in the initial year (with prices set equal to 1) is calculated as
\[g_i = \sum_{k=1}^{n_p} V_{ik}.\]
The domestic supply of product $k$ is equal to
\[q_{s,k} = \sum_{i=1}^{n_s} V_{ik}.\]
Initial values for demand coefficients are then calculated as
\[\underline{D}^\text{init}_{ki} = \frac{1}{g_i}U_{ki},\]
and supply shares are calculated as
\[\underline{S}_{ik} = \frac{1}{q_{s,k}} V_{ik}.\]
Adjusting for stock changes and taxes
Stock changes and a tax correction are distributed over categories of demand by defining
\[c_k \equiv \frac{\Delta B_k - T^d_k}{F_k + X_k + I_k},\]
and then transforming final demand, exports, and investment in the following way:
\[F_k \rightarrow (1 + c_k)F_k,\; X_k \rightarrow (1 + c_k)X_k,\; I_k \rightarrow (1 + c_k)I_k.\]