A standard S/L is already an NGDP predictor

Hypermind has two new NGDP prediction markets up and running, one covering 2020:Q4 to 2021:Q4, and one covering 2021:Q4 to 2022:Q4.
It’s early, and I don’t believe there’s been much trading, but so far the predicted growth rates are rather low (below 4%.)

What is an NGDP predictor? 

If S/L were un hedgeable then the NGDP predictor is white noise. In our case, NGDP predictors measure the distortion from central bank S/L deployment.  So if your central bank is distortionary then the solution to an NGDP predictor is a Black Sholes, which has Greek coefficients for the distortions. That Black Sholes, in current central banking will just predict regularly scheduled recessions. In other words, it will determine what ever coefficient drives the distortion.

This is not to deny the utility of an NGDP predictor, because we do have and intend to keep a distortionary central bank.  But it illustrates that we are better off making 15 year NGDP predictions via a negotiated Treasury inflation.  That allows the central bank to spread the distortions over a longer, but semi-repeatable period. We can plan around the distortions for longer term.