On the construction of the total accounts from the U.S. national income and product accounts: How sensitive are applied general equilibrium results to initial conditions?
Arthur, M. Wiese
Journal of Policy Modeling 17(2): 139-162
1995
ISSN/ISBN: 0161-8938 DOI: 10.1016/0161-8938(94)00030-jDocument Number: 395363
The initial characterization of the economy, particularly with respect to the placement of taxes, can affect model results. This paper demonstrates a method for the construction of a set of accounts, called the Total Accounts, from the U. S. National Income and Product Accounts (NIPA), that facilitates the placement of taxes into appropriate markets. That initial conditions matter is demonstrated in an applied general equilibrium application where the distribution of the burden of taxation across households is shown to be sensitive to initial conditions in predictable ways.