A promising idea in macroeconomics is that of NGDP level targetting. Instead of targetting the inflation rate, the central bank would try to maintain a trend rate of total spending in the economy. Here’s Scott Sumner’s excelent paper making the case for NGDP level targetting. As economic policy suggestions go, it’s extremely popular among rationalists—I recall Eliezer endorsing it a while back.
At the moment we have real-time market-implied forecasts for a variety of things; commodity prices, interest rates and inflation. These inflation expectations acted as an early warning sign of the great recession. Unfortunately, at present there does not exist a market in NGDP futures, so it’s hard to get real-time information on how the economy as a whole is doing.
Fortunately, Scott Sumner is setting up a prediction market for NGDP targetting in New Zealand. A variety of work, including some by Robin Hanson, suggests that even quite small prediction markets can create much more accurate predictions than teams of experts. The market is in the early stages of creation, but if anyone was interested in supply technical skills or financial assistance*, this could potentially have a huge payoff. Even if you don’t want to contribute to the project, you could participate in the market when it launches, which would help improve liquidity and aid the quality of predictions.
A few EA types have already donated, and Scott quickly raised his initial target of $30k within a day or so, but it’s plausible that costs might be higher than expected.
Excellent news.
A promising idea in macroeconomics is that of NGDP level targetting. Instead of targetting the inflation rate, the central bank would try to maintain a trend rate of total spending in the economy. Here’s Scott Sumner’s excelent paper making the case for NGDP level targetting. As economic policy suggestions go, it’s extremely popular among rationalists—I recall Eliezer endorsing it a while back.
At the moment we have real-time market-implied forecasts for a variety of things; commodity prices, interest rates and inflation. These inflation expectations acted as an early warning sign of the great recession. Unfortunately, at present there does not exist a market in NGDP futures, so it’s hard to get real-time information on how the economy as a whole is doing.
Fortunately, Scott Sumner is setting up a prediction market for NGDP targetting in New Zealand. A variety of work, including some by Robin Hanson, suggests that even quite small prediction markets can create much more accurate predictions than teams of experts. The market is in the early stages of creation, but if anyone was interested in supply technical skills or financial assistance*, this could potentially have a huge payoff. Even if you don’t want to contribute to the project, you could participate in the market when it launches, which would help improve liquidity and aid the quality of predictions.
A few EA types have already donated, and Scott quickly raised his initial target of $30k within a day or so, but it’s plausible that costs might be higher than expected.