John H. Cochrane

John Howland Cochrane ( ; born 26 November 1957) is an American economist who has served as the Rose-Marie and Jack Anderson Senior Fellow at the Hoover Institution since 2015. From 1994 to 2015, he served as the AQR Capital Management Distinguished Service Professor of Finance at the University of Chicago Booth School of Business. From 2009 to 2010, he was President of the American Finance Association, on whose board of directors he served from 2003 to 2006. In several articles (including one in the Journal of Finance in 1991, and the Journal of Political Economy in 1996), he develops and tests a "production-based asset pricing model" based on the q-theory of investment.

In two 1992 articles, Cochrane emphasized some features of asset prices which are difficult to account for, such as the predictability of equity returns, and the longterm equity premium. His more recent work, with Monika Piazzesi, studies bond markets. In particular, in a number of papers, Cochrane and Piazzesi study the predictability of bond returns. In recent blog posts and comments, Cochrane tends to focus more on inflation, debt, and the financial impacts brought by COVID-19. In a 2021 post called "Inflation, debt, politics, and insurance at Project Syndicate", Cochrane thinks that whether inflation surge is transitory or continuous or not depends on central banks and the government. If the government doesn't respond to inflation with joint fiscal and monetary stabilization policies, inflation will most likely erupt, and the economy will be in the shadow of debt and slow economic growth.

Fiscal theory of the price level Cochrane's research from the mid-2010s up through to the present day incorporates a fiscal theory of the price level, or the theory that inflation is affected by more factors than simply the supply of money (a consensus that originally formed around the work of monetarist economist Milton Friedman).

Cochrane asserts that as governments and central banks accrue more debt, along with the general public losing confidence in that same government to pay the debt back, inflation is adversely affected. As long as governments incur debt and are able to pay the debt off in a timely manner, then inflation is not majorly realized in the form of consumer price increases across the board felt by consumers.

Other contributions Cochrane has interests in diverse fields of economics, including asset markets, financial crisis and regulations, monetary and fiscal policies, and health insurance. Cochrane has worked on the fiscal theory of the price level, on the debate between permanent and temporary shocks in macroeconomic fluctuations, and the cost of near-rational behavior. Cochrane also developed an online class called "Asset Pricing" that is free and opens to anyone who is interested in learning more about this area. By registering through Canvas, students and faculty who intend to learn more about asset pricing will have the opportunities to take this class and complete relevant quizzes and exams.

Asset Pricing Cochrane is the author of Asset Pricing, a widely used textbook in graduate courses on asset pricing. According to his own words, the organizing principle of the book is that everything can be traced back to specializations of a single equation: the basic pricing equation. In 2001, Cochrane received the TIAA-CREF Institute's Paul A. Samuelson Award for the book. With historian Niall Ferguson and former National Security Advisor H. R. McMaster he participates in the Hoover Institution’s weekly broadcast, Good Fellows - Conversations From The Hoover Institution.

Paul Krugman has repeatedly criticised Cochrane's viewpoints in The Grumpy Economist, both on his own blog, and in a 2009 New York Times article. Cochrane authored a response to Krugman's criticisms on his blog, which was subsequently published in the Wall Street Journal.

Awards Fellow of the Econometric Society (2001) The Association of Private Enterprise Education Adam Smith Award (2024)

Personal life Cochrane's father, Eric, was a historian who specialised in the Renaissance, and taught Italian history at the University of Chicago; John Cochrane spent parts of his childhood in Florence, and speaks Italian. His mother, Lydia G. Cochrane (née Steinway), is an academic translator and French scholar. He is married to Elizabeth Fama, a PhD graduate of the University of Chicago, a young adult book author, and the daughter of noted financial economist Eugene Fama. They have four children.

Cochrane is a noted sailplane pilot who flew an ASW 27 with the callsign BB. Cochrane no longer flies an ASW 27, but still uses the callsign BB. He was a member of the US Team at the 2010 World Gliding Championships in Hungary.