Definition
In the basic (static) model setting, there is no future periods, so the saving is not explicitly return to the economy. In order to model the demand of saving, we keep saving as part of the regional household's utility function.
CGDS sector
In GTAP, the CGDS sector consume commodities in TRAD_COMM directly through intermediate inputs (qf), which is shown in the market clear condition of commodities:
EQUATION MKTCLTRD
# This equation assures market clearing in the traded goods markets (HS1) #
(all,i,TRAD_COMM)
qo(i) = sum{j,PROD_COMM, SHRFM(i,j) * qf(i,j)}
+ tradslack(i) ;
Recall the PROD_COMM set includes TRAD_COMM and cgds from GTAP sets
Relationship between CGDS demand and saving
Then the net investment (the value of CGDS sector minus depreciation (VDEP)) equals to the value of SAVE in expenditure equation, which is the investment = saving condition in the model.
SAVE = VOM("cgds") - VDEP = NETINV