John H. Cochrane – författare

A comprehensive account of how government deficits and debt drive inflationWhere do inflation and deflation ultimately come from? The fiscal theory of the price level offers a simple answer: Prices adjust so that the real value of government debt equals the present value of taxes less spending. Inflation breaks out when people don’t expect the government to fully repay its debts. The fiscal theory is well suited to today’s economy: Financial innovation undermines money demand, and central banks don’t control the money supply or aggressively change interest rates, invalidating classic theories, while large debts and deficits threaten inflation and constrain monetary policy. This book presents a comprehensive account of this important theory from one of its leading developers and advocates.John Cochrane aims to make fiscal theory useful as a conceptual framework and modeling tool, and for analyzing history and policy. He merges fiscal theory with standard models in which central banks set interest rates, giving a novel account of monetary policy. He generalizes the theory to explain data and make realistic predictions. For example, inflation decreases in recessions despite deficits because discount rates fall, raising the value of debt; specifying that governments promise to partially repay debt avoids classic puzzles and allows the theory to apply at all times, not just during periods of high inflation. Cochrane offers an extensive rethinking of monetary doctrines and institutions through the eyes of fiscal theory, and analyzes the era of zero interest rates and post-pandemic inflation.Filled with research by Cochrane and others, The Fiscal Theory of the Price Level offers important new insights about fiscal and monetary policy.

How the euro survived a series of crises, and how to make it more resilientThe euro has survived crises unimagined at its founding: the financial meltdown of 2007–2009, the sovereign debt crisis of 2010–2012, the pandemic, and the Russian invasion of Ukraine. The European Central Bank fought these crises with dramatic policy innovations, buying up vast amounts of debt and providing large loans to banks. But now everyone expects the ECB to intervene routinely, and the euro is more fragile as a result. Crisis Cycle recounts this history and offers recommendations for restoring a durable monetary union.Monetary and fiscal policy are intertwined, especially in a currency union like the eurozone. Member states can be tempted to borrow and spend too much, and then count on the ECB to rescue them by printing money to buy their bonds. To avoid these disincentives, the ECB was founded with a narrow mandate: use interest rates to pursue price stability, and don’t buy sovereign debt. Debt and deficit rules would keep countries from getting into trouble.The ECB’s emergency innovations brought back these disincentives. How can the EU avoid larger and larger bailouts? The authors argue that Europe needs a joint fiscal institution that can provide temporary help to sovereigns, a resolution mechanism so sovereign default is a motivating possibility, and bank reform that ensures sovereign default will not bring down the financial system. This timely book shows how to restore the euro’s ambitious and effective founding framework. The unique group of authors combine extensive policy experience and authoritative academic credentials.

In May 2023, the world’s top economic policymakers and academics convened at the Hoover Institution for the annual Monetary Policy Conference. They met at a tumultuous time: the previous year, inflation had surged, and some believed the Federal Reserve was slow to react. What was behind this surge, and why did the Fed fail to forecast inflation, or perceive it when it happened? Participants considered whether the sluggish response made the situation worse, and how to get inflation back under control.

This volume presents the full proceedings from this conference—the presentations, responses, and discussions. In it, participants debate the meaning of getting monetary policy “back on track,” the significance of recent bank failures, and how to improve forecasting and oversight. A persistent underlying question is whether the Fed should follow a rule-like monetary policy, which maintains predictability in response to fluctuating inflation, GDP, and employment rates. Presenters discuss this issue as they recognize the thirtieth anniversary of the Taylor rule, an important guide to practical monetary policy.

Other topics include a five-century history of central bank balance sheets, inflation targeting in Japan, and lessons from Latin America. Together, these proceedings illustrate and dissect the interaction of financial regulation and monetary policy.

Based on the 2024 Monetary Policy Conference held at the Hoover Institution at Stanford University, Getting Global Monetary Policy on Track reviews recent global inflation, asking how central banks could have better responded and how they can improve their forecasting and policy strategies to avoid inflationary bursts in the future. Discussions delve into the interactions of fiscal and monetary policies, digital currency, and how the European Central Bank has become more dovish, preferring to keep interest rates low.

The publication shares the presentations from economic experts around the globe, who contribute analysis of monetary policy and strategy from Asia, Europe, Latin America, and the United States, in large economies and in emerging markets. It also reproduces the lively and informative discussions at the conference.

Essays on financial regulation examine asset value and equity levels in the US banking system, Treasury market turmoil, Federal Reserve independence, the 2023 UK pension fund meltdown, and regulatory expansion.

Additional topics include labor market responses to the surge in remote work; how Israel handled financial shocks following the 2023 Hamas attack; and continued fallout from the COVID-19 pandemic: the supply, fiscal, and relative demand shocks of the pandemic and how central banks handled postpandemic inflation.

A nonpartisan plan of action for fixing the global economy from fifteen of the world''s leading economistsIn the fall of 2008, fifteen of the world''s leading economists—representing the broadest spectrum of economic opinion—gathered at New Hampshire''s Squam Lake. Their goal: the mapping of a long-term plan for financial regulation reform.The Squam Lake Report distills the wealth of insights from the ongoing collaboration that began at these meetings and provides a revelatory, unified, and coherent voice for fixing our troubled and damaged financial markets. As an alternative to the patchwork solutions and ideologically charged proposals that have dominated other discussions, the Squam Lake group sets forth a clear nonpartisan plan of action to transform the regulation of financial markets—not just for the current climate—but for generations to come.Arguing that there has been a conflict between financial institutions and society, these diverse experts present sound and transparent prescriptions to reduce this divide. They look at the critical holes in the existing regulatory framework for handling complex financial institutions, retirement savings, and credit default swaps. They offer ideas for new financial instruments designed to recapitalize banks without burdening taxpayers. To lower the risk that large banks will fail, the authors call for higher capital requirements as well as a systemic regulator who is part of the central bank. They collectively analyze where the financial system has failed, and how these weak points should be overhauled.Combining an immense depth of academic, private sector, and public policy experience, The Squam Lake Report contains urgent recommendations that will positively influence everyone''s financial well-being—all who care about the world''s economic health need to pay attention.