Production and income: input-output and social accounting matrix approaches

The System of National Accounts (SNA) and the evolution of satellite accounts allowed the development of increasingly realistic and disaggregated macroeconomic models for policy design. The Social Accounting Matrix (SAM), the sophisticated tool within SNA, provides the integration of non-economic and territorial elements into the circular flow of income. As economic policy objectives are often broad and interact with social factors, such as household types and territorial characteristics, the SAM represents a valuable database for the policy maker, being able to capture the complexity of modern economies, both in aggregate and disaggregated terms. Extended multisectoral models based on SAMs offer detailed insights, revealing the interrelationships among industries, primary factors and institutional sectors. These models recently gained renewed attention for analysing policy impacts, especially in contexts like environmental policies, natural disasters, and pandemics.