In his comment on our paper, John H. Herbert brings out an important issue: [N]o one (except KSS, as far as I know) has recommended using the bonds approach for forecasting. KSS however, does not reply on a well-founded statistical basis for their forecasting procedure: it is decidedly ad hoc....

With memories of the energy crisis fading in the midst of an oil glut, one can reflect with objectivity on events of the past two decades. Many papers published in the past several years have attempted to analyze post-embargo energy trends and made observations on whether these new trends...

One of the most important challenges facing energy analysts is to predict future energy consumption levels. The volatility of energy prices following the 1973 oil embargo and the unexpected elasticity of demand to higher prices caught most energy forecasters off the mark (see Energy Daily, "How...