In that paper (Hanson 2013, Shall We Vote on Values, But Bet on Beliefs?*) you say “If the up or the down market had a consistently higher outcome price over most of that week relative to the same market, interest rates would be raised or lowered accordingly.” Can you be more quantitate? Say the price for the bet "inflation will be above inflation target x", was 0.6, and the price for inflation will be below target was 0.38 (not summing to 1 allowing for spread) then what change do you make to current interest rate y. Wouldn’t this suffer from interest rates taking time to filter through to inflation and inflation having other short term causes?
I use that as an example in my main futarchy paper.
In that paper (Hanson 2013, Shall We Vote on Values, But Bet on Beliefs?*) you say “If the up or the down market had a consistently higher outcome price over most of that week relative to the same market, interest rates would be raised or lowered accordingly.” Can you be more quantitate? Say the price for the bet "inflation will be above inflation target x", was 0.6, and the price for inflation will be below target was 0.38 (not summing to 1 allowing for spread) then what change do you make to current interest rate y. Wouldn’t this suffer from interest rates taking time to filter through to inflation and inflation having other short term causes?
Those aren't the sort of market estimates I propose using.