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The author 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!

John Cochrane – Grumpy Economist

John Cochrane, Senior Fellow of the Hoover Institution at Stanford, is The Grumpy Economist. But he claims to not actually be grumpy. On this blog, he provides detailed commentary backed with data and exceptional reasoning on current economic news, finance and policy policy.

r < g

r<g is an essay on the question whether r<g means the government can borrow and not worry about repaying debts. No. Abstract: A situation that the rate of return on government bonds r is less than the economy's growth rate g seems to promise that borrowing has no fiscal cost. r<g is irrelevant for the current US fiscal problems. r<g cannot begin to finance current and projected deficits. r<g does not resolve exponentially growing debt. r<g can finance small...

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Fiscal theory of the price level draft

The Fiscal Theory of the Price Level is a book I'm writing on that topic. It now has a full draft, here. Comments, typos, suggestions, complaints, parts you find too easy, part you find too hard, things you think are wrong, parts you find repetitive, parts you find need better connection, things I should add, things I should delete are all most welcome! I also did a 2 hour video mini-course on FTPL for the Becker-Friedman Institute last summer, with slides/notes...

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Lipson on basic decency

Why are people gloating over Rush Limbaugh’s death? Charles Lipson writes The gloating over Rush Limbaugh’s death ought to shock the conscience. That’s not a political statement. That’s a cri de coeur about how our basic sense of human decency has been warped by political differences.To take one example, a Yale Law professor tweeted he wasn’t just happy Limbaugh had died, he was euphoric.He’s not some drunk being carried out of a rowdy bar. He’s the Charles F. Southmayd Professor of...

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Institutional culture

Arnold Kling has an intriguing series of blog posts on the nature of universities and other institutions that are, as he says, cancel-bait. I removed the cancel-bait part and pass on his observation on the shift in institutional culture, visible in universities but also in corporate and nonprofit institutions and in our politics. 1. The older culture saw differential rewards as just when based on performance. The newer culture sees differential rewards as unjust.2. The older culture...

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Vaccine math. $500 per shot?

I'm reading up on the $1.9 trillion "stimulus." This caught me eye: Biden's plan would set out $160 billion for a nationwide vaccine program that would help state and local governments get the vaccine into people's arms.There are 328 million people in the US. $160 billion is just about exactly $500 per person. Now, I am of the view that the government should have spent a lot more on vaccines, testing, public health and so forth, given the $5 trillion and counting it has cost the...

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Test snafu

Wouldn't it be nice if there were a $5 test that works in minutes, and can find asymptomatic people who might transmit covid? Imagine how many schools, businesses, restaurants, weddings, churches, and so forth could safely open with such a thing. Imagine how much the reproduction rate of the virus could be crushed. There is! And it's sitting on shelves, one of the biggest casualties of the US federal monopoly on this simplest of all consumer goods. From detailed Wall Street Journal...

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The wages of stimulus

 Discussing stimulus, a colleague passed along a factoid -- wages and salaries, he said,  are running $20 billion a month or $240 billion a year below where they should be. If the "stimulus" were to aim entirely to replace all lost wages due to the pandemic, that would stop at $240 billion, not $1.9 trillion. (My colleague is usually a pro-stimulus type.) I forgot to get the source, so I tried to recreate it. Here are some documented numbers, total compensation of employees, wage...

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Inflation issues

 In analyzing whether inflation is coming, Mickey Levy at Berenberg Capital passes along the above graph. These are price indices, so the upward or downward slope measures inflation. Is there inflation? That depends on whether you ask durable goods or services. Why are we experiencing durable good deflation, and will it last? Part of the answer is quality adjustment: The Bureau of Economic Analysis' (BEA's) official inflation indexes are based surveys of product prices that are...

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A modest proposal for vaccine rationing

A mid-20s child of a good friend just got the vaccine. Why? He runs a micro-brewery, which his state deemed "essential," because it's "manufacturing." As the WSJ reportsAfter nursing-home residents and health-care workers, the CDC says priority should go to those over age 75 and an expansive list of “frontline essential workers.”,...“essential workers” ... include those who “work in transportation and logistics, food service, housing construction and finance, information technology,...

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