In September 2002, a new market in "Economic Derivatives" was launched Mowing traders to take positions on future values of several macroeconomic data releases.

• Position: Conferences - Brief Article

In September 2002, a new market in "Economic Derivatives" was launched Mowing traders to take positions on future values of several macroeconomic data releases. Gurkaynak and Wolfers provide an initial analysis of the prices of these options. They find that expectations derived from these market prices are somewhat more accurate than survey-based forecasts, and that they better predict financial market responses to surprises in data. These derivatives also provide market-implied probabilities of the full range of specific outcomes, allowing the authors to measure uncertainty, assess its driving forces, and to compare this measure of uncertainty with the...