Tyler Cowen picks the market consensus over book-writing pundits:
Either the current market estimate of inflation is the best estimate available, or you know that it is wrong and you will be a very rich man. I find the former scenario more plausible.
Cowen is commenting on the Kevin Phillips book, Bad Money, recently out.
Of course book authors may be wary of going directly into the financial markets to wager their hard earned cash, which is why I have advocated prediction markets for pundits in which authors would have a chance to back their book-selling punditry with real money.
In Separating cheap talk from truly held beliefs, I wrote of political pundits with books:
Maybe they believe what they write, and would be willing to subsidize a prediction market out of their book royalties to demonstrate the strength of their convictions. Or how about the books from the current crop of U.S. presidential candidates—I wonder if these books contain any claims that are specific and substantive enough to be either true or false.
If such punditry-based prediction markets were common, mistaken-but-honest demagogues (those pundits who actually believe what they write, and are willing to stand behind it) would end up subsidizing more thoughtful analysts participating in the markets- correct honest demagogues would end up taking home larger financial rewards- and dishonest demagogues would dissemble, seek to avoid being pinned down on specific claims, and when pressed for actionable claims they would run and hide.
[Cross posted from Knowledge Problem]