This Open Access Brief presents the KAPSARC Global Energy Macroeconometric Model (KGEMM). KGEMM
is a policy analysis tool for examining the impacts of domestic policy measures and global
economic and energy shocks on the Kingdom of Saudi Arabia. The model has eight blocks (real
sector fiscal monetary external sector price labor and wages energy population and age
cohorts) that interact with each other to represent the Kingdom's macroeconomy and energy
linkages. It captures New Keynesian demand-side features anchored to medium-run equilibrium and
long-run aggregate supply. It applies a cointegration and equilibrium correction modeling (ECM)
methodology to time series data to estimate the model's behavioral equations in the framework
of Autometrics a general-to-specific econometric modeling strategy. Hence the model combines
'theory-driven' approach with 'data-driven' approach. The Brief begins with an introduction to
the theoretical framework of the model and the KGEMM methodology and then walks the reader
through the structure of the model and its behavioral equations. The book closes with
simulations showing the application of the model. Providing a detailed introduction to a
cutting-edge robust predictive model this Brief will be of great use to researchers and
policymakers interested in macroeconomics energy economics econometrics and more
specifically the economy of Saudi Arabia.
