The problem with letting the BEA set the release period is that time periodic is a hedging opportunity, prohibited in pure cash.
In this type of bet, the value of NGDP is set when we (6 billion of us) all agree it is set, to some precision. Or, when the bets coalesce to a well rounded error function, then there is nothing more to say, the economy has spoke. The economy speaks when a large representative sample has clicked the NGDP betting Icon and place bets, with direct transaction costs zero, fair access to the error surface, free entry and exit.
The pit boss is looking to find mean to variance meets the stated precision then it computes pay off by probability, or odds if you just take the finite bets and do direct convolutions without assuming a particular distribution. Time is gone, the moment is asynchronous when we agree.
How do 6 billion bet?
Spawn identical pits for the insignificant bet. They still get the pay off odds, but they contribute less to NGDP. Queues of small and similar bets go off branch, look a side chain, have their own pit. Transactions costs almost zero. Easy stuff. If you specify a pit boss that tilts the table, no problem under fair access. An inflationary pit boss will pay out slightly more than is take in on bet compression. But fair access nd trade book uncertainty wienerizes the trend.
No comments:
Post a Comment