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In proposing macro markets, this book describes a substantial array of new markets, and attempts to indicate ways around some of the major barriers to the establishment and success of these markets. These important barriers to the establishment of macro markets—perpetual claims, perpetual futures, options, swaps, and analogous markets—are the subject of most of the book. This introduction aims to give an idea of where the book is heading, what kinds of markets might be established, and a broad sense of whether such markets are in the realm of possibility. The different sections of the chapter are: The ideal: A world market for major income risks; Hedging income risk in today's markets; Markets as inventions; and Markets as accidents of history.

This chapter proposes a system for providing substantial foreign aid to countries that have suffered most in their economic progress. It considers how risk-sharing agreements between governments could better manage national risk and describes how the same objective could be achieved by relying on private actors and decentralized markets. It details the steps and processes involved in developing a national risk management system and evaluates the role of macro markets in managing public finance risks.

For the purpose of hedging risks to standards of living, the logical place to look first would be to markets for claims on total income; but such markets do not exist, and they have apparently never even been proposed. By making it possible to hedge the capital value of a stream of aggregate income, markets in perpetual claims or perpetual futures, long‐term swap markets, or retail analogues of these would facilitate management of the kind of longer‐run income risk that really matters to individuals and organizations; nations or other groupings of people could also use such markets to insure themselves against the prospect of a declining standard of living or the prospect of relative poverty. By hedging such risks, these macro markets would allow the natural tendency for convergence of incomes to reduce inequality of incomes, and might make significant progress toward equalizing wealth across nations, regions, categories of people, and individuals. There could be markets for hedging the risk of fluctuations in aggregate income, national income, or aggregate labour income for each country (or even region) of the world, and these could be divided up in different ways—although since most people's income is labour income, creating markets for claims on total income means for the most part creating markets for claims on labour income. The different sections of the chapter consider possible hedging arrangements in perpetual claims or perpetual futures markets for national incomes (market structures and associated institutions), whether income markets should be in actual or full‐employment income, and various measurement issues associated with incomes (including uncertainty).

In attempting to carry to its logical conclusion the premise that there should be sharing, through markets, of standard‐of‐living risks, this book has proposed quite a number of new markets, although not all of the details of the methods of establishment of these macro markets have been worked out. In the absence of a complete specification of the characteristics of the markets and associated institutions, some of the proposed markets appear perhaps unrealistic or improbable, and their potential may not be fulfilled, at least for years, or even decades. However, if the development of the new markets proposed does occur, it could plausibly take place in two stages: in the first, the users of the markets would be a relatively small number of sophisticated traders who make limited use of the markets for their special purposes, promote the initial liquidity of the markets, and create a base from which use of the markets might grow; in the second stage, these markets would then be used by the general public to protect their standards of living, but this stage would not come until the associated institutions, retail markets, facilitate the use by the general public of the new markets. While the first‐stage use of some of the markets proposed might not be far off, it is the second stage, when there is broad use of the markets to protect standards of living, that is most important to achieve. To make the full potential for these new markets a reality, doubts would have to be overcome, investments made in public goods, index numbers developed, incentives and information provided, institutions changed, and the public educated about the merits of the new institutions. These matters are discussed in this chapter.

One reaction to proposals for new markets is that the general public will not want to deal in them, because of some psychological inability to appreciate the benefits that the risk management may offer—such a reaction is often given by people in the futures and options industry, who have seen many innovative contracts fail. The general public, it is asserted, will not trade directly in such futures, and if the reason they will not is that they do not appreciate the benefits of risk management, then it may be difficult for retailers of risk‐management services to repackage the contracts in a form that will interest them. However, the general public, including both individuals and firms, does use some risk‐management services, notably insurance policies—the insurance industry has not failed to market risk‐management policies to the general public, rather, their success has been highly variable. This chapter investigates whether the macro markets proposed by the book resemble the life insurance policies (for which there is a ready market), or whether they more resemble the disability or flood insurance markets or farmers’ hedging markets. This is done by analysing the psychological literature on demand for insurance. The issue of promoting proper public use of macro markets (by public education and proper product design) is also discussed.

Most people are interested in hedging risk of claims on long‐term income flows, rather than on the risk of the next month's or next year's income, and this means that any market that allows hedgers to protect themselves from information that is adverse to their income over the indefinite future must be a market in the present value (capital value) of this income stream, not a conventional futures or options market in the income itself. This chapter considers two ways in which such new markets, where the information about income flows is so intangible, could be created. One way is to create a sort of derivative market, based on an index of observed prices in other (relatively illiquid) markets for claims on the same income stream (settlement based on cash‐market asset price). Liquid markets in residential real estate might be set up this way (this example is pursued in the chapter), and such a method of insuring against adverse information is analogous to that used to provide fire insurance, where the income stream is the flow of rents (or imputed rents) on the property, and the maximum insurance is the present value of this stream inferred from the sale prices of comparable properties. The other way is to create a market for perpetual, or at least long‐horizon, claims on an income flow itself, making no use of prices of claims on the flow in any other market; the income flow can be a theoretical construct of statisticians, not the dividend on any tradable asset, and liquid markets in national incomes might be set up in this way (settlement based on measures of income rather then price, achieved either through perpetual claims or perpetual futures markets).

This final chapter summarises the main arguments and findings of the book and outlines the theoretical and practical implications of a knowledge-based understanding of trade shows in the context of globalisation. At a conceptual level, the chapter discusses how this work advances research streams in economic geography, marketing, and other disciplines interested in trade shows, thus emphasising the multi-disciplinary character of the book. At a practical level, we explore the implications of a knowledge-based view of trade shows for regional and national policy makers in the context of export promotion and innovation support, for local governments that employ these events to boost business tourism, as well as for trade show organisers, and for exhibiting and visiting firms.