John Cochrane

John Cochrane is an economist and senior fellow at the Hoover Institution, having previously been a professor at the University of Chicago Booth School of Business. His textbook "Asset Pricing" (2001) has become the standard graduate-level reference on the theory of asset prices, factor models, and return predictability. His research on discount rate variation — the idea that expected returns change over time as investors' risk aversion and discount rates change — has been influential in understanding return predictability. More recently, Cochrane has developed the "fiscal theory of the price level" as an alternative to monetary theories of inflation, arguing that fiscal policy (government deficits) rather than money supply drives inflation. This theory became particularly relevant during the 2021-2022 inflationary episode.