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

Featured

Carbon Tax

by John H. Cochrane mentioning George P. Shultzvia Grumpy Economist
Friday, November 9, 2018

"The carbon tax is dead; long live the carbon tax" is the headline of Tyler Cowen's Bloomberg column on the failed (again) Washington State carbon tax. And rather decisively, per the picture on the left. "Maybe its failure on the ballot in Washington state will inspire economists to come up with better arguments" challenges the subhead. I can't resist.

Analysis and Commentary

Europe's Banks

by John H. Cochrane via Grumpy Economist
Thursday, November 8, 2018

My visit to Europe resulted in many interesting conversations. There was a stark contrast between the complex regulatory vision of formal presentations and papers, and the lunch and coffee discussion reflecting experience of people involved in actually regulating banks. They seemed to be quite frustrated by the state of things. Disclaimer: this is all completely unverified gossip, and remembered through a fog of jet lag. If commenters have better facts, I'm hungry to hear them.

Featured

State Of Thought On Financial Regulation

by John H. Cochrane via Grumpy Economist
Tuesday, November 6, 2018

I'm at a conference on "Financial cycles and regulation" at the Deutsche Bundesbank. Beyond the individual papers, I find the conversation interesting.

Featured

Kotlikoff On The Big Con

by John H. Cochrane via Grumpy Economist
Monday, November 5, 2018

In preparing some talks on the financial crisis, 10 years later, I ran across a very nice article, The Big Con -- Reassessing the "Great" Recession and its "Fix" by Larry Kotlikoff. Larry is also the author of Jimmy Stewart is Dead – Ending the World's Ongoing Financial Plague with Limited Purpose Banking, from 2010, which along with Anat Admati and Martin Hellwig's The Bankers' New Clothes is one of the central works outlining the possibility of equity-financed banking and narrow deposit-taking, and how it could end financial crises forever at essentially no cost.

Featured

Cross Subsidies And Monopolization, Explained

by John H. Cochrane via Grumpy Economist
Thursday, November 1, 2018

I found a beautiful, clear, detailed, fact-based, and devastating explanation of how forced cross-subsidies, monopolized markets, and lack of competition conspire to strangle the American health care system.

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Corporate Tax Reform

by John H. Cochrane , Michael J. Boskin, Tom Church, Daniel Heilvia PolicyEd
Thursday, September 27, 2018

In late December 2017, Congress passed the Tax Cut and Jobs Act of 2017. A key part of the law lowered the tax rate for both traditional corporations and pass-through entities like S-corps. With so many important issues facing the country why was Congress focused on the corporate tax rate?

Analysis and Commentary

S.2155: Economic Growth, Regulatory Relief, And Consumer Protection Act

by Anat R. Admati, John H. Cochrane , Paul Pfleiderervia Stanford University
Tuesday, September 25, 2018

Thank you for the opportunity to comment on the hearing scheduled for October 2, 2018 on the implementation of S.2155. Three of us sent you a letter on March 6, 2018 when the law was being discussed. We were concerned that the “tailoring” proposed in S.2155 would be used to lower equity requirements and thus endanger the financial system. These concerns are even stronger today. We are alarmed by the recent push from some industry participants and policymakers to weaken capital regulation, since capital regulation, when implemented properly, is the most essential, beneficial, and cost-effective part of banking regulation.

Featured

Supply-Side Health Care

by John H. Cochrane via Grumpy Economist
Wednesday, September 19, 2018

The discussion over health policy rages over who will pay -- private insurance, companies, "single payer," Obamacare, VA, Medicare, Medicaid, and so on -- as if once that's decided everything is all right -- as if once we figure out who is paying the check, the provision of health care is as straightforward a service as the provision of restaurant food, tax advice, contracting services, airline travel, car repair, or any other reasonably functional market for complex services.

Featured

Dollarize Argentina

by John H. Cochrane via Grumpy Economist
Monday, September 10, 2018

Argentina should dollarize, says Mary Anastasia O'Grady in the Wall Street Journal -- not a peg, not a currency board, not an IMF plan, just give up and use dollars. 

Federal Reserve
Analysis and Commentary

Fed Nixes Narrow Bank

by John H. Cochrane via Grumpy Economist
Wednesday, September 5, 2018

A narrow bank would be a great thing. A narrow bank takes deposits, and invests 100% of the money in interest-paying reserves at the Fed. (The Fed, in turn, mostly invests in US treasuries and agency securities.)

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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. . .