tag:blogger.com,1999:blog-6837159629100463303.post801953213352960158..comments2023-06-18T01:25:08.748-07:00Comments on Information Transfer Economics: Is this the market monetarist model?Jason Smithhttp://www.blogger.com/profile/12680061127040420047noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-6837159629100463303.post-34478376731643155402015-01-22T13:23:37.814-08:002015-01-22T13:23:37.814-08:00... thanks for the review Jason.... thanks for the review Jason.Tom Brownhttp://www.google.comnoreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-56568073194482381032015-01-22T10:12:10.214-08:002015-01-22T10:12:10.214-08:00I saw that -- however Sumner does have solutions f...I saw that -- however Sumner does have solutions for some of the specific problems (especially the liquidity) that Sankowski brings up. In particular, Sumner's idea is not for just setting up a place for an NGDP futures market (I'm not sure Sankowski gets the designs right in his list of 1-5), but rather a subsidized market. Sumner thinks the Fed should put up billions of dollars that can be won by the purchasers of futures market contracts -- which I don't think is any of the list of 1-5.<br /><br />In theory, people will always be incentivized to get the right answer because they win money if they do and lose if they don't; it doesn't matter if they don't care about NGDP (or don't have a stake in it).<br /><br />The future market design is actually a bit like more like Intrade (and similar to what Sumner is trying to do now). However, besides the problems I point to here:<br /><br /><a href="http://informationtransfereconomics.blogspot.com/2015/01/is-market-intelligent.html" rel="nofollow">http://informationtransfereconomics.blogspot.com/2015/01/is-market-intelligent.html</a><br /><br />... there is reality that Nate Silver and Sam Wang did as well as prediction markets using polls -- you could probably get a forecast as good as an NGDP futures market using polls as well. Markets seem to be asynchronous polls, at least for the information aggregation problem. But people actually vote so asking them how they will vote should give you some insight; people don't decide which economic shocks happen, so polling gets you stuff like this:<br /><br /><a href="http://informationtransfereconomics.blogspot.com/2015/01/better-than-fed.html" rel="nofollow">http://informationtransfereconomics.blogspot.com/2015/01/better-than-fed.html</a><br /><br />... which is ostensibly a poll of the people who make NGDP happen (at least according to Sumner).Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-89843879059606071752015-01-22T06:57:24.017-08:002015-01-22T06:57:24.017-08:00Regarding futures markets working, I saw this the ...Regarding futures markets working, I saw this the other day...<br /><br />http://monetaryrealism.com/scott-sumner-has-a-new-job/Tom Brownhttp://www.google.comnoreply@blogger.com