The subject of energy has been a high priority research area in the research programs of many national and international research institutions. And rightly so. The two oil shocks of the 1970s have demonstrated the need for countries to adopt appropriate adjustments measures in order to enable them to ride out the effects of the drastic increases in oil prices without any major economic dislocation. In deciding on particular responses to the energy crisis, policymakers can certainly benefit from studies providing some idea of the impact of alternative actions, as well as from suggestions that can expand their range of alternatives. This monograph is an effort to provide policymakers and planners with a tool that would allow an analysis of interaction between energy and the rest of the domestic economy. Given a change in the world energy situation, what can fiscal, monetary and other policy instruments respond to these changes, considering such objectives as internal and external stability? Simulation experiments can directly assist in the estimation of the effects of alternative policy packages for varying energy scenario.