Efficient or Inefficient?

2min Snip

00:00

Play full episode

Summary

Transcript

Episode notes

Interest rates never forecast inflation. Interust rates are kind of ran to walke just like exchange rates. Acid prices don't seem to move on information about fundamentals. If you wanht to call on that, like about cash fllows, they move on discount ratine another way of saying there's money to be made buying what prices are low and selling when prices are high if you can wait a long time. We're sitting on a powder keg. And we're sitting on the possibility of a run a crisis, which would be a sharp unforecast inflation, which the fed can't do. So, yes, it's about risk its. It's not about forecast

What unites John Cochrane the finance economist and “grumpy” policy blogger with John Cochrane the accomplished glider pilot? For John, the answer is that each derives from the same habit of mind which seeks to reduce things down to a few fundamental principles and a simple logical structure. And thus, piloting a glider can be understood as an application of optimal portfolio theory, and all of monetary policy can be made to fit within the structure of a single equation.

John joined Tyler to apply that habit of mind to a number of puzzles, including why real interest rates don’t equalize across countries, what explains why high trading volumes and active management persist in finance, how the pandemic has affected his opinion of habit formation theories, his fiscal theory of price level and inflation, the danger of a US sovereign debt crisis, why he thinks Bitcoin will eventually die, his idea for health-status insurance, becoming a national gliding champion, how a Renaissance historian for a father and a book translator for a mother shaped him intellectually, what’s causing the leftward drift in economics, the need to increase competition among universities, how he became libertarian, the benefits of blogging, and more.

Read a full transcript enhanced with helpful links, or watch the full video.

Recorded January 4th, 2021 Other ways to connect

Follow us on Twitter and Instagram
Follow Tyler on Twitter
Follow John on Twitter
Email us: cowenconvos@mercatus.gmu.edu
Subscribe at our newsletter page to have the latest Conversations with Tyler news sent straight to your inbox.