John H. Cochrane

Rose-Marie and Jack Anderson Senior Fellow
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Biography: 

John H. Cochrane is the Rose-Marie and Jack Anderson 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

Monopoly In History

by John H. Cochrane via Grumpy Economist
Monday, March 18, 2019

Timothy Taylor, the Conversable Economist, tracks down the oft-told story of William Lee and his knitting machine.

In the News

Don’t Forget To Do Your Merger

quoting John H. Cochrane via Bloomberg
Friday, March 15, 2019

Last June, a private equity firm called Vintage Capital Management LLC agreed to buy Rent-A-Center Inc. for $15 per share (about $800 million total, $1.37 billion including debt). As is normal in public-company mergers and acquisitions, the deal could not close right away; Vintage owned another rent-to-own retailer and so there was likely to be a lengthy antitrust review. Vintage and Rent-A-Center agreed that if the deal had not closed by Dec. 17, then either party could walk away, but they also agreed that, if they were still waiting for legal approvals at that time, either side could extend this “drop-dead date” by three months (and then again by another three months).

Analysis and Commentary

Competitive Deposits?

by John H. Cochrane via The Grumpy Economist
Thursday, March 14, 2019

In its death note to narrow banks (link to Federal Register where you can post comments; previous post), the Fed claimed charmingly that retail deposit rates are fully competitive, so we don't need a narrow bank option to help spread the interest on reserves to deposit rates. In the Fed's view, the fact that banks pay so little compared to reserves just reflects the costs (many of them regulatory!) of servicing retail accounts.

Featured

Fed Vs. Narrow Banks

by John H. Cochrane via Grumpy Economist
Wednesday, March 13, 2019

Suppose an entrepreneur came up with a plan for a financial institution that is completely safe -- it can never fail, it can never suffer a run, it offers depositors perfect safety with no need for deposit insurance, asset risk regulation, capital requirements, or the rest, and it pays depositors more interest than they can get elsewhere.

In the News

Socialism Is Now A Classification That No Longer Classifies

quoting John H. Cochrane via Las Vegas Sun
Tuesday, February 19, 2019

Norman Thomas was not easily discouraged. Running for president in 1932, three years into the shattering, terrifying Depression, which seemed to many to be a systemic crisis of capitalism, Thomas, who had been the Socialist Party’s candidate in 1928 and would be in 1936, 1940, 1944 and 1948, received, as this column previously noted, fewer votes (884,885) than Eugene Debs had won (913,693) as the party’s candidate in 1920, when, thanks to the wartime hysteria President Woodrow Wilson had fomented, Debs was in jail.

In the News

Stock Buybacks Are Not The Enemy

quoting John H. Cochrane via Fortune
Thursday, February 14, 2019
Are share buybacks really one of America’s biggest economic problems? You’d certainly think so if you believe the astoundingly kindred attacks coming from both sides of the aisle in Congress.
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Area 45: Is Taxing Wealth “Economic Justice?” With John Cochrane

interview with John H. Cochrane via Area 45
Thursday, February 7, 2019

The merits of the various proposed tax hikes and whether they constitute sound economics.

In the News

AOC Wants To Soak The Rich. Here's Why That's A Bad Idea.

quoting John H. Cochrane via Chicago Tribune
Wednesday, February 6, 2019

Every so often, a rising young Democratic star comes along with an idea that boldly challenges the status quo. Today, it’s Rep. Alexandria Ocasio-Cortez of New York, who wants to raise the top income tax rate. In 1982 it was Sen. Bill Bradley of New Jersey, who proposed an overhaul of income taxes that “seemed revolutionary and impossible,” The Washington Post said in 1986.

In the News

SOTU Review: The 6 Big Domestic Policies Trump Proposed

quoting John H. Cochrane via Conservative Review
Wednesday, February 6, 2019

President Trump’s second State of the Union address was intended to lay out a legislative agenda for divided government. Knowing that the House of Representatives is under Speaker Nancy Pelosi’s control, Trump attempted to strike a unifying and bipartisan tone and invited Democrats to work with him to benefit the country.

Featured

The Death Of The Healthcare Market

by John H. Cochrane via Grumpy Economist
Wednesday, January 30, 2019

People really do not need health insurance for regular small expenses, as they do not need car insurance to "pay for" oil changes. And any insurance system relies on an underlying cash market to find what the right prices are. Collision insurance works reasonably well because there is a supply and demand market for auto repair in which people pay their own money and there are competitive suppliers and free entry, offering services along a wide quality-price spectrum.

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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. . .