The US is hurtling toward another government shutdown. How long could it last? There is no definitive way to answer that question, but two sources offer clues.
The first is historical data: Since 1990, there have been six shutdowns lasting anywhere from three days to 34 days. The average of those six shutdowns is about 14 days.
Then there’s a prediction market on Kalshi, where traders are weighing in not only on whether there will be a shutdown, but also on how long a government shutdown would last.
The probabilities in this market will change in real-time, but as of this writing the market suggests an 18% chance of no shutdown in 2023; a 17% chance of a shutdown lasting less than a week; and a 65% chance of a shutdown lasting one week or more. In other words, odds are the shutdown will last a while if it happens.
On Kalshi, prices are probabilities. For each outcome, the Yes price represents a probability—like an 82% chance of a shutdown above zero days. Seven days or more is given a 65% probability, so the chance of a shutdown of less than seven days is the difference between the two: 82% - 65% = 17%.
The bottom row indicates that there’s a 13% chance that this becomes the longest shutdown ever—surpassing the one that began in Dec. 2018.
Of course, historical data isn’t necessarily predictive and prediction markets aren’t always right. The length of a 2023 government shutdown, if there is one, will depend in part on the particulars. You can read Nonrival’s primer on the situation here.