The GTAP Data Base and the EU IO tablesPresented by

Terrie Walmsley

Csilla Lakatos, Badri Narayanan and Robert McDougall

Motivation for GTAP• Increasing demand for quantitative analysis of global trade issues:

e.g. WTO-Doha Round, NAFTA, EU integration, Kyoto Protocol, China’s WTO accession.

• Historically analysis was done “in-house” in a few agencies: OECD, World Bank, FAO; and at a few university research centers.

• Combines the advantages of Agency and University approaches.• Publicly funded project, based in academia, which supports a

global economic data base and model which are:– fully documented;

– publicly available (free to contributors);

– easy to use (education); and

– accessible to non-modelers.

GTAP Data Base

• Philosophy: Find the best person in the world to do the job and sell them on it!

• GTAP establishes standards, coordinates the work and brings it together into ONE useable data base. – Global coverage: 112 regions (vs. 13 in version 1)

– Sectoral detail: 57 sectors (vs. 37 in version 1)

– 2004 base year

– Bilateral trade data/shipping margins: USDA, CPB

– Protection data: UNCTAD, CEPII, WB, OECD…

– National data bases: national collaborators

– Physical data limited to energy sectors (IEA)

I-O Structure Requirements

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Primary

Imported

Domestic Intermediate usage

Fin

alIntermediate usage

Fin

al

Value added

UF (tax-free)

- Im

por

t d

uty

MF

Primary

Imported

Domestic Intermediate usage

Fin

al

Intermediate usage

Fin

al

Value added

UP (tax-paid)

Indirect taxes

OP

AgroSAM Project• IPTS – EU JRC, Marc Mueller with Ignacio Domínguez and

Hubertus Gay• Objectives

– AgroSAMs for EU-27 – late 2009 with a Disaggregated Agricultural Sector (AgroSAM)

– EU IO tables for GTAP v7.0 and 7.1 – The number of agricultural sub-sectors should allow:

• the incorporation of datasets from already existing economic models (e.g. CAPRI);• the reusability by other modelling systems (e.g. GTAP); • the utilisation of readily available datasets from statistical departments (e.g.

EuroStat, FAOSTAT).

– Other• A transparent and automatised routine for updating AgroSAMs• For GTAP an automated routine for converting SAMs to IO format

AgroSAM Outputs• SUPPLY & USE tables

– SUPPLY – Basic prices• Commodity taxes (vectors)• Trade & Transport Margins (vectors)

– USE – Purchaser prices• Intermediate and final demands• Factor use• Activity taxes

• ‘Missing’– Imports USE matrices

– Commodity tax matrices

– Margin matrices

Common Problems faced by contributors

• Splitting Domestic and imported use matrix

• Building commodity tax matrices

• Trade and transport margins

• Dwellings

• Re-exports

• Concordances

• Negative capital stocks

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I-O Tables Requirements

• Sectoral classification:– Full 57 sectors not required– Separate food and agriculture, energy, other

• Sign conditions: no negative flows except in changes in stocks

• Sectoral balance condition: Sales = Costs• Unusual Shares

– Entropy-theoretic technique – 'flags' strange shares

• Reject and Chopping bloc

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Unusual Shares

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Supply Use ENTROPY Share in Representative Table

IO -Share

Oil Seeds Vegetable Oils 0.38 0.14 0.87Oil and Gas Exports 0.24 0.27 0.00Sugar Sugar 0.23 0.31 0.01Vegetable Oils Vegetable oils 0.15 0.18 0.00Financial services Financial services 0.15 0.14 0.52Forestry Forestry 0.14 0.07 0.36Other minerals Other minerals 0.13 0.26 0.03Trade Oil and gas 0.12 0.18 0.01Business services Consumption 0.11 0.01 0.17Other animal products

Cattle meat 0.11 0.13 0.00

Clean, Disaggregate, Synthesize• Disaggregate

– Of the 113 regions in GTAP 7: only 36 I-O tables have all 57 sectors; no disaggregation needed

– 40 tables need agricultural disaggregation; use agricultural I-O data set.

– 17 tables need non-agricultural disaggregation; use representative table.

• Agricultural Production Targeting – (EUROSTAT: Hans Grinsted Jensen (FOI) and Hsin Huang (OECD))

• Synthesize– Create 19 composite regions.

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Composite Regions: Rules

• Match each member country to a primary region.• Match is by per capita GDP.• Match is only within geographic regions.• Composite region I-O table is linear combination of

primary region I-O tables.

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CountryGDP

(USD B)GDP per

cap. (USD)Best

match

afg 19.0 697 lka

npl 5.6 227 bgd

Volumes and Prices: IEA

energy data sets

MAcMap (CEPII and David Laborde (IFPRI) and UNCTAD). Domestic Support (OECD PSE/CSE), Agreement on Textiles and Clothing (Francois and Worz), Export subsidies (Aziz Elbehri)

protection data sets

International Data Sets: 226 Countries

Goods (COMTRADE and Mark GehlharServices (Nico van Leeuwen and Arjan Lejour, CPB and IMF)

trade data sets

C, I, G, POP: World Bank

macro data set

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IMF

Income and Factor Taxes

Ag Production targeting and Ag IO (EUROSTAT, Hans Grinsted Jensen (FOI) and HsinHuang (OECD))

agricultural data set

Construction Process

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I-O Tables

Fitted I-O

Tables

GTAP Data Base

International Data Sets

FIT

Assemble• Eliminate changes in

stocks

• Reconcile with international data sets: Adjust the IO tables to match the macro datasets

• Entropy theoretic approach

Data Assembly

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GTAP Data Base

Assemble

ParametersPrimary Factor

Splits

FIT'ed

I-O Tables

Income / Factor Taxes

Checks and Comparisons• Across Versions

– Comparison programs: aimed at highlighting large differences between the datasets associated with large flows.

– Entropy-theoretic measure and successive rescaling– Highlighted:

• improved treatment of domestic margins in EU

• Problems with dwellings

• Countries– How much did a countries IO table change during

construction?

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Satellite Datasets

• Energy volumes

• CO2 and non-CO2 emissions

• Land use by Agro zone

• Migration and remittances

• Foreign income payments and receipts

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Future Directions (v8 & 9)

• IO tables – Commodity Taxes– Dwellings– More programs

• Skill shares

• Domestic margins

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Theoretical BackgroundFIT Module

• Bacharach, M. (1970), Biproportional matrices and input-output change, Cambridge.

• James, M. and R. McDougall (1993), “FIT: An input-output data update facility for SALTER”, SALTER working paper 17, Australian Industry Commission.

• Theil, H. (1967), Economics and information theory, North-Holland, Amsterdam.

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