This paper investigates how economic shocks propagate and amplify through the input-output network connecting industrial sectors in developed economies. We study alternative models of diffusion on networks and we calibrate them using input-output data on real-world inter-sectoral dependencies for several European countries before the Great Depression. We show that the impact of economic shocks strongly depends on the nature of the shock and country size. Shocks that impact on final demand without changing production and the technological relationships between sectors have on average a large but very homogeneous impact on the economy.

The recognition of the agency of the knower has enormously enriched our understanding of knowledge production. There is a growing realization that what we know about how we know affects our interpretation of reality. This realization informs the perspective of this paper. As a case study, the paper looks at the problem of randomness vs. determinism. It argues that this problem is not intrinsic to nature but is rather a product of the epistemological approach that does not pay attention to the process of the construction of knowledge. In contrast to the current one-sided solutions of the problem that represent reality as either random or deterministic, this paper argues that reality is neither random nor deterministic. Neither randomness nor determinism exists on its own.