**5. Summary and concluding remarks**

A study of the effects of a social policy measure of the increase in households' income is made by adopting a SAM-based approach applied to Portugal. The national accounting rules and the nomenclatures, defined by the adaptation to European Union of the latest version of the System of National Accounts [2, 3], underlies the SAM structure, whereby numerical and algebraic versions are defined and worked out, with the purpose of supporting this study.

This chapter presents and applies a methodology that has been researched by the author with the aim of defining a method that allows a better knowledge of the different aspects of the activity of a country, as well as carrying out experiments on its functioning. For this, the data of the flows associated with market transactions and transfers, measured by the national accounts, are organised in a matrix form, in such a way that origin, use, and distribution of income can be worked together. Thus, focusing the attention on the parts to be studied, the structural features can be evidenced and multiplier effects of changes on the involved flows can be accounted for. This is carried out in this chapter.

In order to show the comprehensiveness and consistency of the tool used, our study begins with the presentation of the highest aggregated level of a matrix form of the national accounts—a macro SAM. Covering the different types of flows in seven accounts, or rows and columns, from that matrix, it is possible to identify practically all the transactions and transfers, that is, the nominal or monetary flows, measured by the national accounts, within the (domestic) economy, and between the same and the rest of the world, which occurred in a particular geographical space, during a given time period. As illustrated for Portugal in 2015, a first snapshot of the activity of a country can be taken from this macro SAM, which is complemented by the main macroeconomic aggregates, calculated outside that matrix, but with the data of its cells.

From the description of the seven accounts (rows-columns) of the macro SAM, it is possible to identify the current account of institutions as being the part to be focused on for the study of the institutions' income. In turn, for the study of the effects of a social policy measure of the increase in households' income, it is also possible to conclude that, on the one hand, households and the Government in this (current) account could also be identified, and, on the other hand, the labour in the factors of production account can be identified. From this disaggregation, the origin and use of the aggregate income of institutions, namely, of households, the Government, and other institutions, is studied.

Regarding the origin of income, the compensation of labour is the source of about half of the households' income, with the current transfers from the Government representing a little less than a quarter of the same. In turn, current transfers from households are the source of more than a half of the Government's income, with net taxes on production and imports of more of a quarter of the same.

With regard to the use or destination of aggregate income, households use much more than a half of the same in final consumption and just under a quarter in current transfers to the Government, in which the taxes on income are included. Final consumption and current transfers to the households, in which social benefits are included, are the destination of almost all the aggregate Government income, each of which by almost a half.

From this knowledge of the structure of origin and destination of the aggregate income, it was possible to achieve the purpose of studying the impact of the introduction of a social policy measure of the increase on households' income, on the socio-economic activity of a country, and on the associated institutions' income. Therefore, on the one hand, having identified the two main sources of the aggregate income of households, the need for two scenarios was also identified. On the other hand, the identified structures of the origin and use of income, together with the network of linkages that underlie the SAM framework, allowed for a better understanding of the effects portrayed in each of the scenarios.

From the results of these scenarios, it was possible to conclude that the effects of increases in the households' income depend on its origin and the corresponding multiplier effects, which are in turn influenced by the structure of the use of this income. These effects may be more favourable for a specific group or sector, but less so for the whole economy, as shown in our application.

Accordingly, changes (increases and decreases) in the institutions' income, especially in households' income—resulting from social policy measures, or not, directed to specific groups, should not neglect the corresponding structures of origin and use, as well as the macroeconomic impact of the same. To this end, the SAM-based approach introduced in this chapter is a possibility.
