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

Who Pays More Taxes

by John H. Cochranevia Grumpy Economist
Friday, October 18, 2019

A retired guy and a carpenter walk in to a bar, and they each order a beer. When they pay, the fashionable progressive economist asks them, "how much tax did you pay today on the money you got to buy that beer?" The carpenter answers, "Well, I just got my paycheck today. So, that's 30% federal income tax, 5% state income tax, 15% social security and other payroll taxes." The retiree says, "I took the money out of my bank account at the ATM on the way over. There isn't a tax on taking money out of banks so I didn't pay any taxes today."

Featured

Bans On Fracking And Nuclear Power

by John H. Cochranevia The Grumpy Economist
Friday, September 13, 2019

If you want evidence that climate policy has become unhinged from science and quantification, becoming more like a religious cult, look no further than the recent Democratic presidential candidates' proposals to ban fracking immediately and nuclear power soon.

Featured

More On Low Long-Term Interest Rates

by John H. Cochranevia Grumpy Economist
Monday, September 9, 2019

In an environment with stable inflation, the yield curve should typically be inverted. Long term investors care about money when they retire, not next month. Most investors are long-term. If inflation is steady, long-term bonds are a safer way to save money for the long run. 

Analysis and Commentary

Intellectual Property And The Trade Deficit

by John H. Cochranevia Grumpy Economist
Monday, September 9, 2019

"The IP Commission estimates that between $200 billion and $500 billion a year of intellectual property is stolen from the U.S." I found this interesting tidbit in The Atlantic interview of Kevin Hassett, ex CEA chair. (HT Marginal Revolution)

Analysis and Commentary

Low Bond Yields

by John H. Cochranevia Grumpy Economist
Sunday, September 8, 2019

Why are interest rates so low?Here is the 10 year bond yield, by itself and subtracting the previous year's inflation (CPI less food and energy). The 10 year yield has basically been on a downward trend since 1987.  One should subtract expected 10 year future inflation, not past inflation, and you can see the extra volatility that past inflation induces. But you can also see that real yields have fallen with the same pattern.

In the News

How The Aspiring Can Learn To Write Like Economists

featuring John H. Cochranevia Real Clear Markets
Wednesday, August 28, 2019
Greg Mankiw’s credentials are impeccable: Former Chairman of the Harvard Economics Department and the President’s Council of Economic Advisers. What’s even more impressive is his writing.
Featured

Why Stop At 100? The Case For Perpetuities

by John H. Cochranevia The Grumpy Economist
Saturday, August 24, 2019

Issue 100-year Treasurys, advocates the Wall Street Journal. It mentions a short note deep on the Treasury website that Treasury’s Office of Debt Management is conducting broad outreach to refresh its understanding of market appetite for a potential Treasury ultra-long bond (50- or 100-year bonds).

Analysis and Commentary

Summers Tweet Stream On Secular Stagnation

by John H. Cochranevia Grumpy Economist
Friday, August 23, 2019

Larry Summers has an interesting tweet stream (HT Marginal Revolution) on the state of monetary policy. Much I agree with and find insightful: Can central banking as we know it be the primary tool of macroeconomic stabilization in the industrial world over the next decade?

Interviews

John Cochrane On The Ricochet Podcast

interview with John H. Cochranevia Ricochet
Friday, August 23, 2019

Hoover Institution fellow John Cochrane discusses the possibility of a recession.

Analysis and Commentary

Inflation, And History

by John H. Cochranevia The Grumpy Economist
Thursday, August 22, 2019

Phil Gramm and John Early have an excellent WSJ oped on inflation measurement. 

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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. . .