Sunday notes – Three working papers and three prediction markets

It is Sunday morning and I really shouldn’t be blogging, but I just have time to share a couple of working papers with you. First on the list yet another great paper from my friend Bob Hetzel at the Richmond Fed – “A Comparison of Greece and Germany: Lessons for the Eurozone?” Here is the […]

Prediction markets and UK monetary policy

I have long argued that central banks should utilise prediction markets for macroeconomic forecasting and for the implementation of monetary policy. In today’s edition of the UK business daily City AM I have an oped on this topic and about how the Bank of England should have a closer look at prediction markets. See here: IN […]

Gabe Newell on prediction markets – NGDP level targeting and Lindsay Lohan

This is interesting – Gabe Newell on Youtube on the value of prediction markets. I love it…Gabe is co-founder and managing director of Video game developer video game development and online distribution company Valve Corporation (I stole that from Wikipedia). This guy is brilliant and he certainly understands markets. Some of my earlier posts on prediction markets: Yet another argument for prediction markets: […]

Yet another argument for prediction markets: “Reputation and Forecast Revisions: Evidence from the FOMC”

I am already spamming my readers today so this will not be a long post. But take a look at this working paper – “Reputation and Forecast Revisions: Evidence from the FOMC” by  Peter Tillmann. Here is the abstract: “This paper investigates how FOMC members revise their forecasts for key macroeconomic variables. Based on a new data […]

Benn & Ben – would prediction markets be of interest to you?

Benn Steil from the Council on Foreign Relations has an interesting comment on the Federal Reserve’s forecasting performance. I don’t really want to discuss Benn Steil’s views, but rather the fed research he quotes. Here is Steil: “The Fed studied its own staff’s forecasting performance over the period 1986 to 2006. It found that the […]

Prediction markets and government budget forecasts

Recently I have had a couple of posts (here and here) on biases in the forecasts of policy makers and why central banks and governments should use prediction markets to do forecasting instead of relying on in-house forecasts that might or might not be biased due to for example political pressures. Anybody who have studied […]

Central banks should set up prediction markets

I have spend my entire career as an economist doing forecasting – both of macroeconomic numbers and of financial markets. First as a government economist and then later as a financial sector economist. I think I have done quite well, but I also know that I only rarely am able to beat the market “consensus”. […]

Hypermind prediction: Nearly 50% probability of Grexit in 2015

Have a look at the latest numbers from Hypermind’s prediction market on the likelihood of Greece leaving the euro in 2015. In my view this likely is also the kind of probability that the rest of the financial markets put on Grexit in 2015 and given the relatively calm reaction in the European markets to recent […]

Prediction market: Fed on track to hit 4% NGDP growth in 2015

Since December last year the prediction market site Hypermind has been running a prediction market for US nominal GDP growth for 2015 (plus markets for each quarter of the year). I think the development of a prediction market for NGDP growth is extremely interesting and such market can help us much better to understand monetary […]

Markets are telling us where NGDP growth is heading

I am still in Provo Utah and even though I have had a busy time I have watch a bit of Bloomberg TV and CNBC over the last couple of days (to fight my jet lag). I have noticed some very puzzling comments from commentators. There have been one special theme and that has come […]