Morgan Stanley can't figure out the economy

MORGAN STANLEY: There's Something Weird Going On With The Economic Data

We adjust to oil shortages much faster, after two or three tries at it. So there is a cushion the economy keeps to prevent volatile energy prices in line.  There is been a  regime change. It takes a few years for the regime change to start appearing in the stochastic models, because it is not a stochastic process.  So, Morgan Stanley will be screwed up for another year as they cannot do non-linear math. Try channel theory, the entire channel has been calibrated to handle energy price volatility, all goods obey the new regime, all goods proceed so as to minimize the number of steps in energy prices adjustment. Shannon, Benford, Kelly; not DSGE; wrong theory.