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

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.

Analysis and Commentary

Work And Incentives.

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

Ed Glaser has a thoughtful essay at City Journal, "The War on Work -- and How to End It.'' It is interesting that our political class says it wants more Americans to work. Yet there are few activities as hit by disincentives and regulatory barriers than the simple act of paying another person to do something for you.

Analysis and Commentary

Non-Voting Shares Response

by John H. Cochrane via Grumpy Economist
Saturday, June 24, 2017

Todd Henderson and Dorothy Shapiro wrote me a thoughtful response to my post on non-voting shares. 

Featured

Index Funds And Voting Shares

by John H. Cochrane via Grumpy Economist
Friday, June 23, 2017

Todd Henderson and Dorothy Shapiro Lund have an interesting OpEd in the Wall Street Journal, "Index funds are great for investors, risky for corporate governance." In brief, index funds don't participate heavily in monitoring companies, finding information about companies, or corporate control contests.

Analysis and Commentary

The Optimal Inflation Rate

by John H. Cochrane via Grumpy Economist
Wednesday, June 21, 2017

Anthony Diercks has a very useful review of the the academic literature on the question, what is the optimal inflation rate? He includes 150 papers, ordered from low to high inflation.

Analysis and Commentary

Reis On The State Of Macro

by John H. Cochrane via Grumpy Economist
Tuesday, June 20, 2017

Ricardo Reis has an excellent essay on the state of macroeconomics. "Is something really wrong with macroeconomics?"

Featured

The Treasury Portfolio

by John H. Cochrane via Grumpy Economist
Thursday, June 15, 2017

Charlie Plosser makes the case that the Federal Reserve should hold only Treasuries in its asset portfolio, at Hoover's "Defining Ideas" Background: The Fed is essentially a giant money-market fund. Its liabilities are cash and bank reserves. Its assets are .. well, they used to be entirely short term Treasury securities, but now include mortgage-backed securities.

Analysis and Commentary

Living Trusts For Banking

by John H. Cochrane via Grumpy Economist
Monday, June 12, 2017

One of the core problems of financial reform is how to "resolve," AKA bankrupt, a big bank -- how can equity holders be wiped out, and debt holders carve up the remaining assets. Big banks are supposed to craft “living wills,” really living vivisection guides, but that effort is clearly in trouble. This blog post expands on a different idea for bank resolution; let’s call it “living trusts” by a similar analogy to estates.

Featured

NoahLogic

by John H. Cochrane via Grumpy Economist
Sunday, June 4, 2017

My little foray here into the blogosphere sometimes leaves me in slack-jawed amazement at the leaps of illogic in the commentariat. Such was the case last week, when Noah Smith writing at Bloomberg.com, took on a recent post of mine about food stamps.

Analysis and Commentary

A Revised Radical

by John H. Cochrane via Grumpy Economist
Thursday, June 1, 2017

A revised draft of "Michelson-Morley, Fisher, and Occam" is now on my webpage. This paper argues that the long quiet zero bound is an important experiment. The zero bound or an interest rate peg can be stable, and determinate.

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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. . .