Working Papers

The US Recession that Isn’t

US Q1 GDP is given a 69% chance of being positive, according to last trade prices on prediction market Intrade (contract expiry is based on the final GDP release, not today’s advance release).  Intrade pricing suggests a better than even chance that US GDP growth will be positive for every quarter in 2008.  The chance of a recession in 2008 is put at 44.9%, with recession defined as two consecutive quarters of negative GDP growth for the purposes of contract expiry.  The absence of recession on this definition would not necessarily preclude a recession being declared based on the NBER Business Cycle Dating Committee’s methodology.

posted on 30 April 2008 by skirchner in Economics, Financial Markets

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