Keynesian Bets: What's Out There
By Bryan Caplan
As far as I can tell, none of the comments on my Keynesian bet bleg point out or propose a Keynesian bet. On Twitter, however, Noah Smith alerted me to the existence of the following Smith-DeLong bet:
If, at any time between 7/28/2012 and 7/28/2015, core consumer
prices, as recorded in the FRED database series CPILFESL, are up more
than 5% in the preceding 12 months, and if over the same 1-year period
monthly U3 unemployment (as recorded in FRED database series UNRATE) has
not averaged below 6%, then Brad DeLong agrees to buy Noah Smith one
dinner at Zachary’s Pizza at 1853 Solano Ave. in Berkeley CA, and to pay
Noah 49 times the cost–including tax but excluding tip–of Noah’s meal
at Zachary’s in Federal Reserve notes, or in alternative means of
payment accepted by Zachary’s should Zachary’s Pizza no longer be
accepting Federal Reserve notes at the date of the dinner. This cost
will be assessed as the total cost of the dinner to all, divided by the
number of people present, regardless of how much pizza is consumed by or
how much alcohol is drunk by specific individuals.
If however, the above condition is not satisfied, Noah agrees to buy Brad one dinner at Zachary’s.
1>0, so I’m happy to hear about this bet. But you hardly need to be a Keynesian to have low inflation forecasts. A totally atheoretical economist who knew about the TIPS market would make the same prediction. Is there anything juicier out there? I’d especially like contingent bets about nominal GDP growth and labor force participation conditional on fiscal and monetary policy.
P.S. Mmmm. Zachary’s. Noah wins this bet either way.