ABSTRACT
Clopper Almond work described in the preceding paper dealt only with a single fuel, petroleum, albeit in multiple product form. The model as presented contained no explicit market interaction between the economic model and the energy model. The two models under development by Data Resources, on which Verleger reports, carry the modeling process further and seek to more fully couple the energy and economic models. One of the models described is a partial equilibrium model in which “the substitutions between fuels are studied given the underlying demands for energy and then prices are determined in a manner that allows for energy market clearance.” The other model is a general equilibrium model of the U.S. economy in which “energy and nonenergy demands of the economy are considered in a simultaneous equation framework where prices are determined so that all markets clear at every moment of time.”
