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US unemployment after next volatile market


The exact nature of the relationship between economic conditions and the performance of the stock market has been a subject of much controversy, and some proposed models to explain the equity premium puzzle make concrete claims about this connection which we might hope to test.

An important case is a class of models which involve "long-run risk". According to these models, what primarily drives stock market crashes is news about the long-run, and it just so happens that often short-run economic performance gives us the best clues about long-run risks, which leads to the observed pattern of correlation between stock market performance and the business cycle. However, according to long-run risk models this connection is only incidental, and a potential change in the properties of the GDP or consumption time series (such as a change in autocorrelation or conditional heteroskedasticity) can upend it entirely.

This question, along with its sibling question, is intended to test this class of models by eliciting the beliefs of Metaculites about the tightness of the connection between market crashes or tumultous market episodes and current macroeconomic events.

What will be the US unemployment rate after the next volatile market episode?

This question resolves as the civilian unemployment rate reported by the BLS in units of percentages 6 months after the first month in which the VIX index closes above 50 in any day of that month.

To illustrate with an example, if the VIX closes above 50 for the first time after this question opens on some day in March 2032, this question would resolve as the civilian unemployment rate reported by the BLS for September 2032.

If the VIX doesn't close above 50 at any time until the resolution date of this question, the question resolves ambiguously.

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