The likelihood of a U.S. recession occurring in 2008 has significantly receded in recent months, according to trading in Intrade.com’s prediction market. It has dropped to 32%, way down from 75% in March. A recession is defined by Intrade.com as two successive quarters of negative real growth in GDP.
Prediction markets are a forum for placing bets on some event occurring. They are thought to provide better forecasts than other approaches such as opinion polls and panels of experts. People are putting down real money on their opinions, so there is an extra incentive to try and get it right.