A 2005 Social Accounting Matrix (SAM) for Ireland

This paper describes the construction of a Social Accounting Matrix (SAM) for Ireland for the year 2005. The SAM describes the full circular flow of money and goods in the Irish economy. The SAM includes 55 activities, 55 commodities, two factors of production (capital and labour), one account each for households, enterprises, government and investment/saving, three tax-related accounts (direct and indirect taxes and custom duties), a trade and transport margin account and three external sectors (UK, Rest of the EU and Rest of the World). Its construction takes place in three steps: (1) building the macro-SAM; (2) building an initial unbalanced SAM making use of a variety of additional data sources, and (3) balancing the SAM using the cross-entropy method. By treating the SAM as a linear model of the Irish economy and by specifying certain accounts as exogenous, the SAM can be used to simulate the effect of shocks to the exogenous variables or accounts. Examples of such multiplier analysis are presented at the end of this paper.