Is Krugman a betting man?

14/05/2012 § Leave a comment

First, my apologies for bouncing off Paul Krugman two days in a row. But this is a chance to see who is a better forecaster, Krugman or the hive-mind of New Zealand.

As reported over the weekend, Greek politicians have failed to form a government. They are now in ‘emergency talks’ to form a government palatable to enough people to stand. Things don’t look good; new elections may have to take place. The core problem is austerity and the bail-out package the the EU.

Krugman blogs that ‘[s]ome of us have been talking it over’, and that Greece might leave the euro. More precisely, he predicts:

Greek euro exit, very possibly next month.

Wow. That’s a pretty concrete prediction.

What does iPredict say? There’s a contract for this: ‘Greece to announce before 1 January 2013 departure from the Eurozone’ (Ticker: EURODEP.GREECE.2012). It’s currently trading at $0.3452. The people trading on iPredict give Greece a 35% probability of leaving the euro by the end of the year (we’re only in May now). Krugman says ‘very possibly next month’.

Who will be right?

Wanna bet on it?

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