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A New Modeling Framework For Medium-Term Energy-Economy Analysis in Europe

Pantelis Capros Pavlos Karadeloglou, Gregory Mentzas and Pierre Palette

Year: 1989
Volume: Volume 10
Number: Number 4
DOI: 10.5547/ISSN0195-6574-EJ-Vol10-No4-2
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Abstract:
This paper presents the main theoretical and empirical issues concerning the HERMES-MIDAS Linked Systems (HMLS) of models. The systems are very large scale and are intended to perform European-wide medium-term investigations of the energy-economy interactions. The macroeconomic model follows the neo-Keynesian approach to economic modeling while the set of energy demand and supply models follows a mired engineering-econometric one. We facilitate the presentation of the linkage by proposing a typical aggregate neo-Keynesian model into which we introduce energy and proceed by establishing a general framework for energy-economy model linkages. This framework is applied to the coupling ofthe actual large-scale models. Finally, thepolicy analysis capabilities of the HMLS in contrast to the original HERMES model are examined by means of a theoretical and empirical comparison of the two systems' simulation properties and policy responses.



Does OPEC Matter? An Econometric Analysis of Oil Prices

Robert K. Kaufmann, Stephane Dees, Pavlos Karadeloglou and Marcelo Sanchez

Year: 2004
Volume: Volume 25
Number: Number 4
DOI: 10.5547/ISSN0195-6574-EJ-Vol25-No4-4
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Abstract:
We assess claims that OPEC's ability to influence real oil prices has diminished and that the relationship between real oil prices and OPEC production can be used to test competing hypotheses about OPEC behavior. An econometric analysis indicates that there is a statistically significant relationship among real oil prices, OPEC capacity utilization, OPEC quotas, the degree to which OPEC exceeds these production quotas, and OECD stocks of crude oil. These variables "Granger cause" real oil prices but real oil prices do not "Granger cause" these variables. These results imply that OPEC influences oil prices and that previous models cannot be used to test competing models for OPEC production behavior. The effect of OECD oil stocks on real oil prices indicates that there may be an important externality in private decisions regarding optimal crude oil stocks.





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