Karl Smith makes an error

That is overwhelmingly things should just move along as if we were in a smoothly rotating economy. Not because we are, but simply because the number of changes is so massive and so spread out randomly. Modeled Behavior

Karl has been contrasting network theory and smooth theory for some time, and garners some insights. This time he makes and error in a post about PSST vs AD-AS. The links are not random, they are chosen to be coherent with existing links, to add value while minimizing inventory exchanges. The effect is the Corridor Hypothesis. I call it channel theory because it has an associated math. I mean, stages of production that yields economies of scale.