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

Carbon Tax Update

by John H. Cochrane via Grumpy Economist
Monday, January 21, 2019

An interesting question emerged from some discussion surrounding my last carbon tax post. How big will the tax be? The letter says $40 a ton, but then rising. But how far? And in response to what question? It occurs to me that the two obvious targets lead to radically different answers.

Analysis and Commentary

Lend The Shutdown?

by John H. Cochrane via Grumpy Economist
Monday, January 21, 2019

The Federal Government seems to be obeying with rather remarkable accuracy the constitutional mandate that the government may not spend money that has not been appropriated by Congress. I would be curious to hear from legal experts, however, what stops the government from lending money to federal employees, or just guaranteeing loans.

Featured

Volalitily, Now The Whole Thing

by John H. Cochrane via Grumpy Economist
Monday, January 14, 2019

An essay at The Hill on what to make of market volatility, from Dec 31. Now that two weeks have passed, I can post the whole thing. I add some graphs too. (Though at the rate things are going any forecast will have been proved wrong in two weeks!) What’s causing the big drop in the stock market, and the bout of enormous volatility we’re seeing at the end of the year?

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Property Tax Present Value

by John H. Cochrane via Grumpy Economist
Friday, January 11, 2019

How much is the property tax? In Calfornia, we pay 1% per year. That doesn't seem bad, except that property values are very high.

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Krugman On Optimal Taxes

by John H. Cochrane via Grumpy Economist
Sunday, January 6, 2019

As you may have noticed, I try very hard not to get in to the business of rebutting Paul Krugman's various outrages. The article "The economics of soaking the rich" merits an exception. I will ignore the snark, the... distoritions, the ... untruths, the attack by inventing evil motive, the demonization of anything starting with the letter R, and focus on the central economic points.

Analysis and Commentary

Selgin On IOER And TNB

by John H. Cochrane via Grumpy Economist
Friday, January 4, 2019

George Selgin has a nice piece on TNB and IOER, which I missed when it came out in September, but it's still relevant. (HT a correspondent. TNB is "The Narrow Bank" which I wrote about here; IOER is interest on excess reserves. The Fed pays banks interest on reserves, which are accounts that banks hold at the Fed.)

Analysis and Commentary

Deregulation

by John H. Cochrane via Grumpy Economist
Friday, January 4, 2019

Many of us free-market types bemoan how poorly designed regulation hurts economic growth. But unlike "stimulus," regulation is a death by a thousand knives. Each one seems innocuous, but they add up. It's hard to tell the story without details. There is no handy government statistic on "impact of regulations." We tend to talk about what we can easily measure. Likewise, there is a general sense that the current deregulation effort may be helping, but again without details it's hard to know if this is truth or spin.

Analysis and Commentary

Volatility

by John H. Cochrane via Grumpy Economist
Monday, December 31, 2018

An essay at The Hill on what to make of market volatility: What’s causing the big drop in the stock market, and the bout of enormous volatility we’re seeing at the end of the year?

Featured

Sumner On Teaching Economics

by John H. Cochrane via Grumpy Economist
Sunday, December 30, 2018

Scott Sumner has a terrific post on teaching economics. The core ideas of economics are extremely counterintuitive and are not accepted by most people.... Non-economists also tend to reject the central ideas of basic economics, and for reasons that are not well justified.

Analysis and Commentary

Homeless

by John H. Cochrane via Grumpy Economist
Saturday, December 29, 2018

Christopher Rufo at the New York Post has an interesting article on homeless problems in Seattle. The analysis rings true of many other areas, especially San Francisco. It is also a good microcosm of how policy and law in so many social and economic areas stays so profoundly screwed up for so long.

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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. . .