A model for forecasting energy economic systems

This paper presents a small integrated model which can be used for forecasting the behaviour of energy economic systems. The model is small, particularly when compared with the huge econometric modelling systems that are being used for the same purpose, and it is integrated in the sense that it forecasts both energy demand and gross domestic product simultaneously, taking into account the two way linkage existing between them. The energy economic system is formulated in a linear dynamic mode and Kalman filter is used for estimating the model. It is also applied for forecasting the state of the system in the future. The implementation of the model to the Greek energy economic system is presented as a case problem.