Forecasts of future energy requirements by the manufacturing sector of Greece

Abstract

An econometric model consisting of two equations is used to forecast the future electricity and other fuel requirements by the manufacturing sector of Greece. In the model, the energy prices and the manufacturing output are treated as exogeneous variables while total energy requirements and the ratio of electricity to other fuels constitute the endogeneous ones. Further to the forecasting the model is used to calculate short-run and long-run price elasticities and also the time pe¬riod needed to pass for the manufacturing sector to complete its adjustment pro¬cess towards its desired ratio of electricity and other fuel consumption. In view of these considerations it is concluded that the model can be used both for fore¬casting purposes and also as an instrument for formulating a proper price policy for energy with respect to the manufacturing sector.