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TSCAPE: A Time Series of Consistent Accounts for Policy Evaluation Edward J. Balistreri Alan K. Fox U.S. International Trade Commission Washington, DC Introduction Construct consistent social accounts for United States Cover 1978 to 2001 Aggregate to two-digit SIC level Draw on variety of data sources Calibrate data for internal consistency Preserve integrity of trade, GDP data Data Sources for TSCAPE: U.S. Department of Commerce Bureau of Economic Analysis (BEA) Value added by factor and sector (approx. 2-digit) Benchmark IO tables (1982, 1987, 1992, 1997) National Income and Product Accounts (NIPA) Trade Policy Information System (TPIS) Trade by TSUS, Schedule B (1978-1988) Trade by HTS 10-digit (1989-2001) Scope of TSCAPE Defined by quantity index for GDP by industry (GDPI) Available at 2-digit level From 1977 to present Defined by TPIS Highly disaggregated Available from 1978 to present Discontinuity in Trade Data 1978 to 1988: TSUS, Sch. B to SIC 4 digit 1989 to 2001: HTS10 to SIC 4 digit Based on DOC concordance Only half of lines originally mapped to SIC DOC concordance substantially revised and extended by authors DOC concordance used unchanged No handshake between TSUS and HTS10 Discontinuity between 1988 and 1989 TSCAPE Use Matrix Architecture Final Demand Merchandise Trade Use Srv Trade Goods Industry Factors . Value Added Gross Output C+I+G Gross Make TSCAPE Make Matrix Architecture Industries Goods Make Gross Make Gross Output Construction of Social Accounts Calculate real GDPi qVAi GDPi1996 Complete VA matrix with GDPI data on factor payment shares by industry Calculate real intermediate purchases by sector If qUse available, TgtUseg ,i qUsei Useg1996 ,i If not, use interpolated BEA IO data Build Make matrix Aggregate GDP is then consistent with NIPA Convert to coefficients, interpolate Multiply by real gross output from GDPI Calculate final demand components Establish Consistency Value added matrix: no changes Merchandise trade: no changes Minimize loss function subject to Zero profit condition No excess demand Income balance Optimization Problem: Variables Free Variables GOi Gross output by industry IUseg,d Final demand by commodity and category (except trade) Φi Scalar for total intermediate demand by industry Fixed Parameters TgtIUseg,d Target final demand by commodity and category TgtUseg,i Target intermediate use of commodity by industry Tgtξd Aggregate final demand mix from NIPA accounts Optimization Problem: Specification TGTIUSE 1 IUSE TGTIUSE 2 g d g ,d g ,d g ,d 1 g i TGTUSEg ,i i TGTUSEg ,i TGTUSEg ,i 2 1 d TGT d g TGTIUSEg ,d g TGTIUSEg ,d TGT d g TGTIUSEg ,d Subject to GOi g i TGTUSEg ,i f ValueAdded f ,i i MakeCoefi,g GOi i i TGTUSEg ,i d IUSEg ,d d g IUSEg ,d f i ValueAdded f ,i 2 Resulting Baseline Labor’s value share of GDP averages 58% Imports’ share of GDP grew from 7% to 16% Exports’ share of GDP grew from 6% to 12% Protection fell dramatically in some sectors Electronic Equipment (down by 86%) Industrial Machinery (down by 88%) Gross Domestic Product Billions of 1996 Dollars 10000 9000 8000 Billions of 1996 dollars 7000 6000 Other Value Added 5000 4000 3000 2000 Labor Income 1000 0 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Aggregate Imports and Exports Billions of 1996 Dollars 1600 1400 Billions of 1996 dollars 1200 1000 800 600 400 200 0 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 export import 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Relative Growth of Trade and Income Index, 1978 = 1.0 5 4.5 4 Index (1978 equals one) 3.5 3 2.5 2 1.5 1 0.5 0 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 GDP 1989 1990 Imports 1991 1992 Exports 1993 1994 1995 1996 1997 1998 1999 2000 2001 For More Information [email protected] http://www.georgetown.edu/faculty/ejb37/ [email protected] http://www-personal.umich.edu/~alanfox