John H. Cochrane

Senior Fellow
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Biography: 

John H. Cochrane is a senior fellow at the Hoover Institution. He is also a research associate of the National Bureau of Economic Research and an adjunct scholar of the CATO Institute. 

Before joining Hoover, Cochrane was  a Professor of Finance at the University of Chicago’s Booth School of Business, and earlier at its Economics Department. Cochrane earned a bachelor’s degree in physics at MIT and his PhD in economics at the University of California at Berkeley. He was a junior staff economist on the Council of Economic Advisers (1982–83).

Cochrane’s recent publications include the book Asset Pricing and articles on dynamics in stock and bond markets, the volatility of exchange rates, the term structure of interest rates, the returns to venture capital, liquidity premiums in stock prices, the relation between stock prices and business cycles, and option pricing when investors can’t perfectly hedge. His monetary economics publications include articles on the relationship between deficits and inflation, the effects of monetary policy, and the fiscal theory of the price level. He has also written articles on macroeconomics, health insurance, time-series econometrics, financial regulation, and other topics. He was a coauthor of The Squam Lake Report. His Asset Pricing PhD class is available online via Coursera. 

Cochrane frequently contributes editorial opinion essays to the Wall Street Journal, Bloomberg.com, and other publications. He maintains the Grumpy Economist blog.

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Recent Commentary

Analysis and Commentary

Thornton On Interest Rate Humility

by John H. Cochrane via Grumpy Economist
Wednesday, July 19, 2017

Dan Thornton has an interesting essay, "The Limits of Monetary Policy: Why Interest Rates Don’t Matter." Just why do we think that the Fed raising and lowering interest rates has a strong effect on output (or inflation)? Just why does the Fed control short-term interest rates rather than the money supply, or something else?

Analysis and Commentary

Ray Of Hope Update

by John H. Cochrane via Grumpy Economist
Thursday, July 13, 2017

The July 13 Wall Street Journal editorial updates yesterday's ray of hope. One remaining debate is over Ted Cruz’s “freedom option.” The Texas Senator’s amendment says that any insurer that offers at least one ObamaCare-compliant plan could also sell other types of coverage off the exchanges. 

Featured

A Ray Of Health Insurance Hope

by John H. Cochrane via Grumpy Economist
Tuesday, July 11, 2017

Kristina Peterson, covering the senate health bill in in the July 11 Wall Street Journal reports a ray of hope for our legislative and policy process: “If we’re going to subsidize Americans who can’t afford health insurance, do it directly. Don’t do it through the premiums of others,” said Sen. Jeff Flake (R., Ariz.)

Featured

Disrupting The Health Care Industry: Choice Through Competition

by John H. Cochrane via Policyed.org
Tuesday, July 11, 2017

The most important driver of revolutions in price and quality comes from new companies entering a market. But numerous rules and regulations have made health care into a uniquely uncompetitive market. A revolution in health care will require eliminating the restrictions that prevent new entrants to the market.

Featured

Free Market Health Care?

by John H. Cochrane via Grumpy Economist
Monday, July 10, 2017

Farzon Nahvi, writing in the New York Times, reiterates the tired argument that health care can't be left to the free market, because people in comas can't negotiate.

Analysis and Commentary

What's Good About Economics (Sometimes)

by John H. Cochrane via Grumpy Economist
Friday, July 7, 2017

Bryan Caplan has a nice post at ecconlib. The last part is an ode to the value of simple economic theory, much disparaged in public debate.

Analysis and Commentary

Pollyanna

by John H. Cochrane via Grumpy Economist
Thursday, July 6, 2017

In case you stay up at night worrying about the next financial crisis, the good folks at the Financial Stability Board have produced a nice soothing little video.

Federal Reserve
Featured

Mallaby, The Fed, And Technocratic Illusions.

by John H. Cochrane via Grumpy Economist
Wednesday, July 5, 2017

One of the frustrations -- or perhaps challenges -- of studying monetary economics and monetary policy is how Fed talk and writing on economic mechanisms, causal channels, and effects of policies is far ahead of our actual, scientific knowledge. And writers outside the Fed go leaps and bounds beyond the Fed in advocating strong policies based on the latest stories.

Featured

Automation And Jobs

by John H. Cochrane via Grumpy Economist
Saturday, July 1, 2017

I am often asked to opine about whether automation will destroy all the jobs. Yes, we talk about tractors, which brought farm employment from something like 70% of the country at the beginning of the 20th century to about 3% today. And cars, which put the horse drivers out of business. And trains, which put the canal boats out of business.

Analysis and Commentary

More Non-Voting Shares

by John H. Cochrane via Grumpy Economist
Monday, June 26, 2017

Tim Kroencke at the University of Basel wrote a nice follow up on non-voting shares, which I share with permission. Some of the controversy was whether companies would issue shares and whether investors would by them. It turns out, yes, and he sends a gorgeous example in which control rights and cash flow rights are priced differently and react to different events.

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Current Online Courses

Asset Pricing, Part 1, via Coursera and the University of Chicago

This course is part one of a two-part introductory survey of graduate-level academic asset pricing. We will focus on building the intuition and deep understanding of how the theory works, how to use it, and how to connect it to empirical facts. This first part builds the basic theoretical and empirical tools around some classic facts. The second part delves more deeply into applications and empirical evaluation. Learn more. . .