Linking The Energy Sector To A Macroeconomic Model

The structural approach in the analysis of an energy system proposed in Section 11.4 also reveals additional links between the energy sector and other sectors in an economy which have been rather neglected in conventional energy demand analysis.

There are a number of transmission channels for the interaction between energy and the other components of a macroeconomic model. We start from the basic aggregate supply-demand relationship relating imports M, gross domestic product Q, private consumption C, public consumption G, investment I and exports A':

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