World Crisis Index

Intrade, the Ireland-based prediction market, has launched a World Crisis Index. This index is a sum of the prices of 8 current markets Intrade is making in the area of global crisis, including a markets on recessions and growth rates in industrialized countries, US unemployment rates, the possibility of new US military action, and other issues. This sum is then normalized and reported. The Intrade markets first came to my attention via an email from Robin Hanson, who is arguably the world’s leading expert in prediction markets. Intrade had a good deal of success in predicting the outcomes of the last election cycle.

I followed the market fluctuations in the electoral issues pretty closely last year, specifically through Intrade’s partnership with Rasmussen Reports. What was interesting to me was how well the markets predicted changes in press coverage, from positive to negative or more interestingly, from sparse to dense and vice versa.