Forecasting energy demand through a dynamic input-output model

This paper builds a dynamic input-output model able to forecast energy demand in different economic and legislative scenarios. Its main features are these. ( 1) As an input-output model embedded in a social accounting matrix that takes into account the structure of the economy and the relations between sectors ( industries) and institutions ( households). ( 2) As an applied and computable general equilibrium model it relates the system of prices and quantities. ( 3) As a dynamic model it considers the evolution of coefficients and energy multipliers. These are the key tools of our forecasting model and our main contribution. The simulations performed for the Spanish economy show that quantity shocks are more important than price shocks, due to the low price-elasticity of the demand for energy.