The Grumpy Economist
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News, views and commentary from a humorous free-market point of view. Covers articles on economists, environment, banking, finance, financial reform, health economics, inflation, monetary policy, taxes, regulation and more. John H. Cochrane is the The Grumpy Economist, a Senior Fellow of the Hoover Institution at Stanford and was formerly a professor at the University of Chicago Booth School..
The Grumpy Economist
2M ago
Aftermath. Reflections on the Claudine Gay affair. Over at Substack.  ..read more
The Grumpy Economist
3M ago
An essay on substack; interpreting US inflation history via fiscal theory, prepared as comments for a session at the AEA meetings.  ..read more
The Grumpy Economist
3M ago
Don't piss people off unless you have to. Over at Substack.  ..read more
The Grumpy Economist
3M ago
A new post over at Substack, a nice essay by Greg Conti on the future of universities.  ..read more
The Grumpy Economist
3M ago
This is my first post over at Substack. Follow me here and let me know if it isn't working.
The post is in praise of interest on reserves and abundant reserves, with (of course) some suggestions for improvements.  ..read more
The Grumpy Economist
3M ago
Colorado's Supreme Court kicks Trump off the ballot (WSJ). I wrote earlier forecasting constitutional crisis with next election. Legal chaos is starting right on schedule.
Summary: Both sides are casting their opponents as illegitimate. That justifies profound norm-breaking behavior. Political battles are being fought in the courts, so control of the courts and the judicial system now becomes vital to political success. When you can't afford to lose an election you do anything to win. Scorched earth rules the day.
This affair offers a catch-22 to the Supreme C ..read more
The Grumpy Economist
3M ago
This is a second post from a set of comments I gave at the NBER Asset Pricing conference in early November at Stanford. Conference agenda here. My full slides here. First post here, on new-Keynesian models
I commented on "Downward Nominal Rigidities and Bond Premia" by François Gourio and Phuong Ngo. The paper was about bond premiums. Commenting made me realize that I thought I understood the issue, and now I realize I don't at all. Understanding term premiums still seems a fruitful area of research after all these years.
I thought I understood risk premiums
The t ..read more
The Grumpy Economist
3M ago
What's the basic story of economic regulation?
Econ 101 courses repeat the benevolent dictator theory of regulation: There is a "market failure," natural monopoly, externality, or asymmetric information. Benevolent regulators craft optimal restrictions to restore market order. In political life "consumer protection" is often cited, though it doesn't fit that economic structure.
Then "Chicago school" scholars such as George Stigler looked at how regulations actually operated. They found "regulatory capture." Businesses get cozy with regulators, and bit by bit regulations ..read more