Futures prices were well above spot prices for most commodities during most of the Great Depression; evidently the spectacular declines in agricultural prices caught many people by surprise. Based on the historical correlations between commodity prices and consumer prices, commodity markets anticipated stable consumer prices during the first year of the Great Depression. The dramatic drop in nominal Treasury-bill yields thus should be read as a drop in ex ante real rates. Later in the Great Depression, markets anticipated deflation, but not as severe as actually occurred.

Causal relations between federal expenditure and taxation are analyzed using an approach based on the invariance of econometric relationships in the face of structural interventions. Institutional evidence for interventions or changes of regime combined with econometric tests for structural breaks are used to investigate the relative stability of conditional and marginal probability distributions for each variable. The patterns of stability are the products of underlying causal order. We find two distinct causal structures operating in the postwar era. Before the mid-1960's, taxes appear to cause spending. After the late 1960's, taxes and spending are causally independent.

Futures prices were well above spot prices for most commodities during most of the Great Depression; evidently the spectacular declines in agricultural prices caught many people by surprise. Based on the historical correlations between commodity prices and consumer prices, commodity markets anticipated stable consumer prices during the first year of the Great Depression. The dramatic drop in nominal Treasury bill yields, thus, should be read as a drop in ex ante real rates. Later in the Great Depression, markets anticipated deflation, but not as severe as actually occurred.

Results from the Iowa Political Stock Market are analyzed to ascertain how well markets work as aggregators of information. The authors find that the market worked extremely well, dominating opinion polls in forecasting the outcome of the 1988 presidential election, even though traders in the market exhibited substantial amounts of judgment biases. Their explanation is that judgment bias refers to average behavior, while in markets it is marginal traders who influence price. They present evidence that in this market a sufficient number of traders were free of judgment bias so that the market was able to work well.