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John H. Cochrane

John H. Cochrane

In real life I'm a Senior Fellow of the Hoover Institution at Stanford. I was formerly a professor at the University of Chicago Booth School of Business. I'm also an adjunct scholar of the Cato Institute. I'm not really grumpy by the way!

Articles by John H. Cochrane

Inflation speculation

4 days ago

I’m working madly to finish The Fiscal Theory of the Price Level. This is a draft of Chapter 21, on how to think about today’s emerging inflation and what lies ahead, through the lens of fiscal theory. (Also available as pdf). I post it here as it may be interesting, but also to solicit input …

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Inflation Explainer

7 days ago

Bari Weiss asked me to write a short post for her substack offering some inflation explanations on the occasion of post-Thanksgiving shopping.  It’s Black Friday, ‘70s-StyleBlack Friday begins tonight, and Americans, after emerging from our collective turkey coma, will dive into our sacred, national ritual: shopping. Those who haven’t shopped lately are in for a rude awakening: …

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Grumpy on inflation at CATO

12 days ago

I had a great time at the CATO monetary policy conference last week. A brief view on why we’re having inflation and the chance it will continue:  Briefly, a helicopter dropped. The Fed fell flat. And here we go. Grumpy got steamed up on this one. If the embed doesn’t work, try the direct link or the …

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A convenient myth: Climate risk and the financial system

16 days ago

A Convenient Myth: Climate risk and the financial system. At National Review Online. In an October 21 press release, Janet Yellen — Treasury secretary and head of the Financial Stability Oversight Council (FSOC), the umbrella group that unites all U.S. financial regulators — eloquently summarized a vast program to implement climate policy via financial regulation:”FSOC is …

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Inflation meditation

17 days ago

The discussion about inflation is pretty confused. There is a lot of confusion about aggregate demand vs. individual demand, aggregate supply vs. supply, and about relative prices vs. inflation. My theme: Inflation is entirely about “demand,” not “supply.” Fixing the ports, the chips, the pipelines, the labor disincentives, the regulations, are all great and good, and …

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Academic Freedom at Stanford — commentary

19 days ago

This is a follow up to a post on the Stanford faculty petition on free speech. I place my comments here, in a separate post. I want to be super-clear that the signatories signed the letter of the last post, and endorse nothing else. What does it say? Free speech, free inquiry, academic freedom. Period. Not …

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Academic Freedom at Stanford

19 days ago

 Academic Freedom at Stanford[This petition was sent to the president of Stanford on April 13th, 2021]The signatories of this letter are concerned about the state of academic freedom in American universities. Freedom of expression and open inquiry are vital to the search for truth, which is the core mission of the academic enterprise. To preserve …

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Fed courage.

20 days ago

From Federal Reserve Bank of New York, How Bad Are Weather Disasters for Banks?Kristian S. Blickle, Sarah N. Hamerling, and Donald P. MorganFederal Reserve Bank of New York Staff Reports, no. 990 November 2021AbstractNot very. We find that weather disasters over the last quarter century had insignificant or small effects on U.S. banks’ performance. This stability …

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Hoover Fellows

20 days ago

It’s time to get those applications in for the Hoover Fellows program. This is a program for young scholars. It’s a real job, not a postdoc — 5 year contract, renewable for another 5 years. No teaching required. It’s appropriate for new PhDs but especially for people several years out of PhD.  The current Hoover Fellows are …

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Woke week

November 2, 2021

The institutions of civil society are now thoroughly politicized. “Wokeness” is their ideology and religion,  and mastering an ever-changing arcane vocabulary is now the key to access to the elite, as well as making sure you’re not the next one sent to the proverbial Gulag. I can’t keep up with everything in this vein. Still, I’ve …

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Transitory Inflation: A Fisherian Fed?

October 28, 2021

Should the Fed raise interest rates fast? Or should it leave them alone, figuring inflation will be “transitory?” Lots of models, including ones I play with, predict that a constant unchanging interest-rate peg leads to stable inflation. If there is a fiscal shock, it leads to a one-period price-level jump, but no further inflation, so long …

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Central bank expansionism

October 26, 2021

A keynote talk at the FGV EPGE (Brazilian School of Economics and Finance) 60th anniversary conference, program here. Direct link to my talk here (YouTube).  (I start at about 4:00 if you’re impatient). I plan to turn these thoughts in to an essay at some point. All the conference videos here The theme: Central banks, and especially the US …

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Supply

October 25, 2021

The Revenge of Supply, at Project SyndicateSurging inflation, skyrocketing energy prices, production bottlenecks, shortages, plumbers who won’t return your calls – economic orthodoxy has just run smack into a wall of reality called “supply.” Demand matters too, of course. If people wanted to buy half as much as they do, today’s bottlenecks and shortages would not …

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Build back sausage

October 16, 2021

Inspired by Casey Mulligan’s blog post, I went to read some of the “Build Back Better” bill. (Is it just me, or doesn’t “Build Back Better” sound a lot like “Make America Great Again?”) Heavens, not the whole thing — that’s way beyond me. I just read the first half of the child care tax credit, …

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Sowell Nobel?

October 7, 2021

There is less than a week to go before the Economics Nobel Prize. Dear Nobel Committee: How can you not give the prize to Tom Sowell this year? Tom’s work evidently merits a Nobel purely as a contribution to economics, covering many issues. But we can’t ignore what year it is, and what’s going on in the …

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What’s in the reconciliation bill? A conversation with Casey Mulligan.

October 5, 2021

 A podcast discussion with Casey Mulligan. What’s in the reconciliation bill? How will it work? Link to the podcast page, with lots of other formats. Yesterday Casey tweeted that he had read the entire 2,400 page bill. Casey does this sort of thing, as explained in his book “Your’e hired.” I have been trying to figure out …

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“Non-profit” housing at NYT

October 5, 2021

Every now and then the old New York Times resurfaces, with detailed reporting, actual facts, whether or not they support The Narrative. Such is the case with an article I recommend, Housing Boss Earns $1 Million to Run Shelters Despite a Troubled Past, by Amy Julia HarrisSince 2017, … the city has awarded more than …

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Portfolio podcast

October 5, 2021

I did a Rational Reminder podcast and video, focusing on portfolio theory, but also a tour through asset pricing. My hosts Benjamin Felix and Cameron Passmore were unusually well prepared and asked great questions! Video below, or go here for video, podcast, and transcript for people (like me) who read more than listen.

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FiveThirtyEight p-hacking

September 29, 2021

 A correspondent sends me the lovely FiveThirtyEight site,  on how to p-hack your way to scientific glory.  Should I be proud or ashamed that it only took me 30 seconds to get a 1% p value? I fault it though for much too modest an effort, compared to many papers I have read. Include judges, …

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Inequality/opportunity survey

September 27, 2021

I was interested by a simple survey run by the Archbridge Institute on attitudes regarding inequality vs. opportunity, and  equality vs. equity issues. Reducing inequality, “there should be no Billionaires” is only the top issue for a quarter of people. Equality of opportunity, and help for those on the bottom garner about 60%. The demographic consistency is …

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Treasury holdings

September 27, 2021

 Another great graph from Torsten Slok at ApolloForeigners hold less, Fed holds more. However, the Fed doesn’t really hold Treasurys. The Fed turns Treasurys into interest-paying reserves, which banks hold. And banks turn reserves into bank deposits and other assets which we hold. So it is really a big shift from foreign to domestic holding. …

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Hope for California — housing edition

September 23, 2021

 California has at last passed the first laws overturning some residential zoning restrictions. WSJ coverage here.  From the California YIMBY press release, “The end of exclusionary, single-unit zoning in California is a historic moment — we’ve taken a huge step toward making California a more affordable, equitable, and inclusive state.”…SB 9 … makes it legal to …

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Interest rate survey

September 22, 2021

Torsten Slok passed on a lovely graph, created from the Philadelphia Fed survey of professional forecasters: It’s not just the Fed, whose own forecasts and dot plots have the same characteristics. Some potential lessons1) Just you wait. There is the story of the hypochondriac, who when he died at 92 had inscribed on his tombstone “See, I …

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Boosters

September 21, 2021

I was going to write about the FDA’s idiotic booster recommendations, and then I found the perfect answer on Marginal Revolution, which I will quote in its entirety for the few readers who don’t read MR every dayMy first reaction upon hearing that boosters were rejected was to ask the same thing: would these same …

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Debt ceiling modest proposal — perpetuities

September 20, 2021

The debt ceiling dance has started again. Read Treasury Secretary Janet Yellen in the Wall Street Journal. A modest proposal: Issue perpetuities.  The Treasury computes the total amount of debt by its face or principal value, not its market value*. If the Treasury issues a bond that pays $1 coupons each year for 10 years and …

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Inflation, debt, politics, and insurance at Project Syndicate

September 17, 2021

An essay at Project SyndicateInflation in the Shadow of DebtToday’s inflation is transitory, our central bankers assure us. It will go away on its own. But what if it does not? Central banks will have “the tools” to deal with inflation, they tell us. But just what are those tools? Do central banks have the …

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Inflation in the Shadow of Debt

September 17, 2021

Generally speaking, inflation can be stabilized with little recession if people believe the necessary policy tightening will be seen through, rather than abandoned at the first signs of pain. Unfortunately, US economic authorities have done little to inspire such confidence.

STANFORD – Today’s inflation is transitory, our central bankers assure us. It will go away on its own. But what if it does not? Central banks will have “the tools” to deal with inflation, they tell us. But just what are those tools? Do central banks have the will to use them, and will governments allow them to do so?Should inflation continue to surge, central banks’ main tool is to raise interest rates sharply, and keep them high for several

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Inflation in the shadow of debt

September 11, 2021

(Note: This post uses mathjax equations. If you see garbled latex code, come to the original source.) The effect of monetary policy on inflation depends crucially on fiscal policy. In standard new-Keynesian models, of the type used throughout the Fed, ECB, and similar institutions, for the central bank to reduce inflation by raising interest rates, there …

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Sowell on grand movements

September 11, 2021

A correspondent sends me this gem from Tom Sowell: This was written in 1995. So no, he was not talking about any of the great causes that inundate us today. He was writing about causes in the 20th century going back to eugenics. But it seems both prescient and timeless. Source The Vision of the Anointed, link …

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Climate economics

September 7, 2021

An essay on climate economics at National Review. ***Climate policy is ultimately an economic question. How much does climate change hurt? How much do various policy ideas actually help, and what do they cost? You don’t have to argue with one line of the IPCC scientific reports to disagree with climate policy that doesn’t make economic sense.Climate …

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