# International Futures Help System

## Economic Linkages

The economic model and the two physical models have many variables in common. As in the agricultural model, IFs generally uses the values in the physical model to override those in the economic model. To do so, it computes coefficients in the first year that serve to adjust the physical values subsequently. The adjustment coefficients serve double duty - they translate from physical terms to constant monetary ones, and they adjust for discrepancies in initial empirical values between the two models.

The Energy Investment section already described how desired investment, TINEED, is passed to the Economic model using the adjustment coefficient sidsf. The adjustment coefficient, ZSR is used to convert production:

*where*

ZSR is a convergence of ZSRI to a value of 1 in 30 years and WEPBYear converts the energy units, which are in BBOE to dollars.

The adjustment coefficient SCSF is used to convert consumption:

where

Note that this assumes that consumer make up a constant 60 percent of consumption of total primary energy. Also SCSF remains constant over time.

For stocks, imports, and exports, WEBPBYear serves as the adjustment coefficient

Finally, the indexed price (with a base of 1) in the energy sector of the economic submodel (PRI) is simply the ratio of current to initial regional energy price (ENPRI) time the value of PRI in the first year.