from the Federal Reserve Bank of Richmond – Econ Focus Third Quarter 2013
There are many similarities between physics and economics. Both fields explore movement of objects. In one case, and economic variables in the other and they use many of the same mathematical tools and techniques. It is not uncommon for economists to follow theoretical physics as a hobby.
Economist John Cochrane takes his interest in physics up a level — or, more accurately, several levels: He flies unpowered planes, known as gliders, competitively. Many people would find that hobby less daunting than another way Cochrane spends his nonresearch time: discussing reforms to the financial system, the tax code, and health care in newspaper and magazine articles and on his blog, The Grumpy Economist.
Cochrane is known for arguing against the popular view that more regulation is needed to fix the financial system; typically, he says, regulation ends up encouraging risk taking. He has also studied the fiscal theory of the price level, the some what controversial view that large fiscal deficits can overpower the central bank’s attempts to control inflation. His wide-ranging work has made Cochrane a key voice in the public policy debates of the last several years.
Cochrane joined the faculty of the University of Chicago’s economics department in early 1985, and moved to its Booth School of Business in 1994. He is also a Senior Fellow at the Hoover Institution, and is the author of Asset Pricing, one of the most commonly used graduate textbooks for finance. Aaron Steelman interviewed Cochrane at his office in Chicago in late August 2013. Renee Haltom and Lisa Kenney contributed to the interview.
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