Hello everyone.

I’m coding a dynamic recursive CGE, with 11 sectors. I’m at the part concerning the “capital accumulation”. We know the general form is this: K(t+1) = INV(t)+(1-delta)K(t).

But in my case, I notice in the SAM (social accounting matrix) that only 3 sectors have investment. Here are my questions:

1- Do I need an accumulation equation for each of the 11 sectors?

2- If this is the case (i.e: I need an accumulation equation of capital for each sector), can I do it without certain sectoral investments?

I might have, for example, for agriculture K(agr, t+1) = INV(agr, t) + (1-delta)K(agr,t), while for transport, the accumulation won’t contain investment (as there is none in the SAM), and it will look like: K(TR, t+1) = (1-delta)K(TR,t)

3- To avoid any issues, can I simply do 1 equation of capital accumulation, which contains the aggregate capital and aggregate investment? (basically summing capital demand, and also investment demand)?

Thank you, apologies if my questions are confusing, will do my best to clarify.