Thursday , September 19 2019
Home / Econbrowser - James Hamilton / Prediction Markets on Recession by January 2021

Prediction Markets on Recession by January 2021

Summary:
PredictIt, accessed 4pm Pacific today: Why the recent movement? One piece of information, the Manufacturing PMI: Source: TradingEconomics.com. Below 50 indicates contraction. In addition, despite the assurances of the administration, markets do not seem to believe in an incipient turnaround: Figure 1: 10 year-3 month Treasury spread, (blue), 10 year-2 year (red) and 5 year-3 month (green), all in %. Federal Reserve via FRED, Treasury, author’s calculations. All this against a backdrop of elevated (to say the least) policy uncertainty. Figure 2: Economic Policy Uncertainty index (blue). Source: policyuncertainty.com accessed 8/22/2019. Note that big data in the form of Google Trends suggests heightened interest in the possibility of recession. Figure 3: Google Trends: search word

Topics:
Menzie Chinn considers the following as important:

This could be interesting, too:

Menzie Chinn writes Guest Contribution: “Identifying the German business cycle”

Menzie Chinn writes Some Observations on Determining Business Cycle Chronologies

Menzie Chinn writes Additional Graphs for Econ 435 Lecture

Menzie Chinn writes Freight Shipping Growth and Recession Probability

PredictIt, accessed 4pm Pacific today:

Prediction Markets on Recession by January 2021

Why the recent movement? One piece of information, the Manufacturing PMI:

Prediction Markets on Recession by January 2021

Source: TradingEconomics.com.

Below 50 indicates contraction.

In addition, despite the assurances of the administration, markets do not seem to believe in an incipient turnaround:

Prediction Markets on Recession by January 2021

Figure 1: 10 year-3 month Treasury spread, (blue), 10 year-2 year (red) and 5 year-3 month (green), all in %. Federal Reserve via FRED, Treasury, author’s calculations.

All this against a backdrop of elevated (to say the least) policy uncertainty.

Prediction Markets on Recession by January 2021

Figure 2: Economic Policy Uncertainty index (blue). Source: policyuncertainty.com accessed 8/22/2019.

Note that big data in the form of Google Trends suggests heightened interest in the possibility of recession.

Prediction Markets on Recession by January 2021

Figure 3: Google Trends: search word “recession”. Accessed 8/22/2019, 5:10pm Pacific.

Menzie Chinn
He is Professor of Public Affairs and Economics at the University of Wisconsin, Madison

Leave a Reply

Your email address will not be published. Required fields are marked *