chapter  32
15 Pages

Top-down and bottom-up models

WithBora Kat

Energy has become even more important today, as the demand for energy has remarkably increased and it has been an integral part of economic activities. Moreover, the scarcity of natural energy resources as well as the environmental problems that accompany increased energy use revealed the need for economic models in which the link between economic activities and energy use is represented. Significant progress occurred in the efforts to create such links, from basic relationships to sophisticated procedures and theoretically consistent frameworks over the course of time. This chapter scrutinizes these linking efforts on the basis of two broad modeling paradigms: top-down (TD) and bottom-up (BU) modeling.