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

Futures Forecasts

by John H. Cochranevia Grumpy Economist
Friday, June 7, 2019
Torsten Slok at DB updates this lovely graph on occasion. Here's what it means. Fed fund futures are essentially bets on where the Federal funds rate will be at various points in the future. Thus, you can read from the dashed lines the market's guess about where the federal funds rate will go -- assuming that the bets are priced to have an even chance of winning or losing.
Featured

Institutionalized Nonsense

by John H. Cochranevia Grumpy Economist
Thursday, June 6, 2019

When, last week, the Treasury issued its currency manipulation report, I thought it was a joke. Treasury put Germany and Italy on its "monitoring list" of countries suspected of "currency manipulation."

Featured

Fed Nixes Narrow Banks Redux

by John H. Cochranevia Grumpy Economist
Thursday, May 30, 2019

As a quick review: Narrow banks take your money and invest it 100% in interest-paying reserves at the Fed. They are completely immune from runs, failures, and financial crises. You would get a lot higher interest than the big banks currently pay. The Fed should be giving them a non-systemic medal. Instead, the Fed is fighting them tooth and nail.

Analysis and Commentary

An Apocalyptic View Of Central Banks

by John H. Cochranevia Grumpy Economist
Thursday, May 30, 2019

In the department of genuinely terrible, and terrifying, ideas, I just got the a request from Simon Youel, the Media and Policy Officer at Positive Money, regarding the appointment of Mark Carney's successor as Governor of the Bank of England. Positive money is organizing a "joint letter to the Financial Times, calling on the Chancellor to appoint someone who’ll foster a pluralistic policy-making culture at the central bank."

Analysis and Commentary

Cost Divergence

by John H. Cochranevia Grumpy Economist
Tuesday, May 28, 2019

This lovely picture is from Why are the prices so D*mn High? by Eric Helland and Alex Tabarrok. (It's covered in Marginal Revolution: The Initial post, Bloat does not explain the rising cost of education, and an upcoming summary on health care.)

Analysis and Commentary

Refreshing YIMBY At NYT

by John H. Cochranevia Grumpy Economist
Thursday, May 23, 2019

Farhad Manjoo writes an excellent YIMBY (yes in my back yard) essay in the New York Times, remarkably placing the blame squarely where it belongs -- progressive politics.

Policy InsightsFeatured

The US Debt—Causes And Consequences

featuring John B. Taylor, Michael J. Boskin, John F. Cogan, John H. Cochrane, Daniel Heilvia PolicyEd
Wednesday, May 22, 2019

The federal government is borrowing at unprecedented rates. Spending regularly exceeds revenue, and this shortfall is predicted to grow dramatically in the near future. The result is a large and growing federal debt that threatens future Americans’ prosperity and security. What are the consequences of this higher federal debt and what can we do about it?

Analysis and Commentary

Clemens On Minimum Wage

by John H. Cochranevia The Grumpy Economist
Tuesday, May 21, 2019

Jeff Clemens offers a "roadmap for navigating recent research" on minimum wages in a nice CATO policy analysis. A review and a doubt.

Featured

Two Videos

by John H. Cochranevia The Grumpy Economist
Thursday, May 16, 2019

My Hoover colleague Russ Roberts just finished a nice video on inequality. Among other takeaways, he stresses that the people who were rich in 1980 are not the same people or even families who are rich now. It is not true that "the rich got richer." He also tracks individuals through time, and poor individuals got richer to. There is a lot more economic mobility in the US than the standard talking points.

Friedman FundamentalsFeatured

Fellows With Friedman

featuring John H. Cochrane, Michael J. Boskin, David R. Henderson, Thomas Sowell, Richard A. Epstein, Alvin Rabushka, Robert E. Hallvia PolicyEd
Thursday, May 16, 2019

In a Wall Street Journalop-ed, “America Needs an Alternative Maximum Tax,” John Cochrane proposes a new kind of tax that caps the amount that people would pay in taxes to prevent indefinite tax-rate hikes. He asks, “How much is the most anyone should have to pay? When do taxes indisputably start to harm the economy and produce less revenue—when government takes 50% of people's income? 60%? 70%?” If there is a maximum amount that an individual pays, then once past that cap they wouldn’t pay any further federal income tax for that year.

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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. . .