Sunday, February 16, 2020

Supply and demand in local economics

Act 1: If housing is too expensive, allow the supply curve to operate.

In a surprising bit of excellent economics,  Conor Dougherty  writes "Build Build Build Build..."in Sunday's New York Times.

The story starts with the usual way of doing business (meaning, not doing business) in California:
A developer had proposed putting 315 apartments on a choice parcel along Deer Hill Road — close to a Bay Area Rapid Transit station, and smack in the view of a bunch of high-dollar properties. ... Zoning rules allowed it, but neighbors seemed to feel that if their opposition was vehement enough, it could keep the Terraces unbuilt....
Mr. Falk could see where this was going. There would be years of hearings and design reviews and historical assessments and environmental reports. Voters would protest, the council would deny the project, the developer would sue. ...
Spoiler: Where did this all end up?
Today, after eight years of struggle, his career with the city is over, the Deer Hill Road site is still just a mass of dirt and shrubs, and Mr. Falk has become an outspoken proponent of taking local control away from cities like the one he used to lead.
Mr. Dougherty comes to a most un-Times like view of the problem.
America has a housing crisis. ...One need only look out an airplane window to see that this has nothing to do with a lack of space. It’s the concentration of opportunity and the rising cost of being near it.... There is, simply put, a dire shortage of housing in places where people and companies want to live — and reactionary local politics that fight every effort to add more homes.
Nearly all of the biggest challenges in America are, at some level, a housing problem. Rising home costs are a major driver of segregation, inequality, and racial and generational wealth gaps. You can’t talk about education or the shrinking middle class without talking about how much it costs to live near good schools and high-paying jobs. Transportation accounts for about a third of the nation’s carbon dioxide emissions, so there’s no serious plan for climate change that doesn’t begin with a conversation about how to alter the urban landscape so that people can live closer to work.
We tend to look to laws, edicts, regulations and other top-down solutions to problems. Mr. Dougherty notices we are a democracy, and one that at a local level is quite responsive to the desires of people who show up at town meetings. If this is to change, the attitude of the people in the room has to change.
the real solution will have to be sociological. People have to realize that homelessness is connected to housing prices. They have to accept it’s hypocritical to say that you don’t like density but are worried about climate change. They have to internalize the lesson that if they want their children to have a stable financial future, they have to make space. They are going to have to change.
Along the way, we meet Sonja Trauss, heroine of the YIMBY (yes in my back yard) movement who  "thought the Deer Hill Road project was too small."
Ms. Trauss...made her public debut a couple of years earlier, at a planning meeting at San Francisco City Hall. When it was time for public comment, she stepped to the microphone and addressed the commissioners, speaking in favor of a housing development. She returned to praise another one. And another. And another.
In backing every single project in the development pipeline that day, Ms. Trauss laid out a platform that would make her a celebrity of Bay Area politics: how expensive new housing today would become affordable old housing tomorrow, how San Francisco was blowing its chance to harness the energy of an economic boom to mass-build homes that generations of residents could enjoy. She didn’t care if a proposal was for apartments or condos or how much money its future residents had. It was a universal platform of more. Ms. Trauss was for anything and everything, so long as it was built tall and fast and had people living in it. 
My italics. Ponder how astonishing it is that anyone living in San Francisco or writing in the New York Times could say something like this.

Sonja also understands that ideas have to change.
her goal wasn’t to enact any particular housing policy, but to alter social mores such that neighbors who fought development ceased being regarded as stewards of good taste and instead came to be viewed as selfish hoarders.
Selfish, and intensely hypocritical. My Palo Alto neighbors fight development here, forcing all the people who build our houses, wait on our tables, and staff the businesses who pay our taxes, to drive 50 miles from Gilroy or Tracy. They are also parodies of bleeding heart inequality and climate warriors. 

Ms Trauss and Mr. Dougherty understand not only the mechanics of supply curves, vintage economics of real estate, the responsiveness of local governments to their constituents, but they get deep theorems about political economy: 
Ms. Trauss... argued that the entire notion of public comment on new construction was inherently flawed, because the beneficiaries — the people who would eventually live in the buildings — couldn’t argue their side.
“An ordinary political process like a sales tax — both sides have an opportunity to show up and say whether they’re for or against it,” she said. “But when you have a new project like this, where are the 700-plus people who would initially move in, much less the tens of thousands of people who would live in it over the lifetime of the project? Those people don’t know who they are yet. Some of them are not even born.”
This is a deep issue for land control regulation. "Affordable housing" whether directly by government  or by forcing developers to provide it (i.e. an implicit tax on new housing) is directed to long-time residents who are already here. The crying need is for housing for people who want to move here, to take the great jobs this area has to offer. That is what reduces inequality, enhances opportunity, and reduces carbon. The Bay Area has enacted quite a few museums of poverty to allow long-time residents with little or no income to stay, and to stay that way. 

Mr. Falk took a step that allowed the 300 unit plan to proceed, which he paid for with his job. He didn't dare read aloud the last half of his resignation letter. 
“All cities — even small ones — have a responsibility to address the most significant challenges of our time: climate change, income inequality, and housing affordability,” Mr. Falk had written. “I believe that adding multifamily housing at the BART station is the best way for Lafayette to do its part, and it has therefore become increasingly difficult for me to support, advocate for, or implement policies that would thwart transit density. My conscience won’t allow it.”
Lafayette in general has not yet had the change of ideas.

That California is a one-party state may actually help. If this were partisan, it would be easy to tar pro-development forces as evil Republicans who want to line to pockets of real estate developers. Instead, note how this argument hits all the progressive goals -- inequality, climate, affordability, homelessness, and nobody is talking about economic growth.  Well, it does help both. If an argument can be made inside a party, perhaps common sense has a better chance to emerge. Sensible climate policy disappeared from public debate when climate became a partisan cleavage issue.

Some of my libertarian friends have pushed back, saying that local communities have a right to build walls and drawbridges if they like. But if they want views, they can buy the property and keep it pristine.


Act 2: Uber congestion.

On Saturday, Eliot Brown at Wall Street Journal covered Uber and Traffic 
Five years ago, Travis Kalanick was so confident that Uber ...rides would prompt people to leave their cars at home that he told a tech conference: “If every car in San Francisco was Ubered there would be no traffic.”
Today, a mounting collection of studies shows the opposite: Far from easing traffic, Uber and its main rival Lyft..are adding to congestion in numerous U.S. downtowns.
...Multiple studies show that Uber and Lyft have pulled people away from buses, subways and walking, and that the apps add to the overall amount of driving in the U.S.
Surprise, surprise, if a method of transportation becomes cheaper and better, people use more of it. They substitute out of owner driven cars, yes. But Ubering substitutes away from a parked car, not a driven car!  People  also out of public transit, walking, bicycling and so forth. And they take more trips.

As usual, cities are full of complex regulatory schemes to allocate an underpriced resource -- caps and special fees on Uber and Lyft, for example.
Officials in San Francisco, Chicago and New York have cited congestion as the main rationale for new fees they recently enacted on Lyft and Uber rides in each of the cities.
As usual, the point of regulation here as it is in real estate, is to privilege access to free resources to status quo users -- to existing homeowners who like free views, to drivers of their own cars, to taxicab companies, to money-losing public transit. And a mess results.
Uber and Lyft now emphasize the ways they steer riders toward alternatives to their ride-hail cars, such as by incorporating public-transit options into their apps. 
Hmm. Clutter up the apps with more things people don't want? That's not likely to work.
They have both launched shared scooters and bikes.. 
With their own set of problems

The answer is hiding in plain sight, though not celebrated in this article:
[Uber and Lyft] and have lobbied heavily for congestion pricing in cities including New York, so that all cars on the road—not just theirs—share the penalties for added traffic.
Uber is “determined to continue our work to improve access to shared and active transportation modes, while also doubling down in our efforts to advocate for road pricing,” a spokesman said.
Aha! If the streets are congested with cars, charge all cars for using the streets. Real time electronic tolling is now easy to do. How the car is owed and operated is irrelevant. Every car causes the same congestion.  

How much should the toll cost?
drivers in major cities cruise for fares without passengers an estimated 40% of the time.
The biggest factor by far is the large amount of time Uber and Lyft drivers spend without any passengers, hunting for fares. A December report by the California Air Resources Board found ride-hailing cars are driving with no passengers 39% of the time; New York City estimates such cruising at 41%. 
Well, it surely should cost more to drive than to park. That Uber drivers are cruising around on free city streets, that move at speeds indistinguishable from parking, while awaiting rides is an obvious misuse of a free resource.

It's a win - win. Either we get unclogged streets, or we get a windfall of revenue for bankrupt cities. Or both.

Friday, February 7, 2020

New paper: fiscal theory of monetary policy

A second new paper: "A fiscal theory of monetary policy with partially repaid long-term debt."

By "fiscal theory of monetary policy" I mean a model with standard DSGE ingredients, including inertemporal optimization and market clearing, monetary policy described by interest rate targets, price or other frictions, but closed by fiscal theory, "active" fiscal policy rather than "active" monetary policy.

I aim to build a standard simple but somewhat realistic model of this sort, a parallel to the three equation textbook model that has been part of the new-Keynesian tool kit since the 1990s. I keep the model as simple and standard as possible, so the effect of the innovations one the fiscal side are clearer.

Two parts of the specification are central. First, long-term debt allows the model to produce a negative response of inflation to interest rates. Long-term debt also allows a fiscal shock to result in a protracted inflation, which slowly devalues long term bonds, rather than a price level jump.

Second, and most important, the paper writes down a process for fiscal surpluses in which today's deficits are partially repaid by tomorrow's surpluses. Look quickly at the surplus response functions in my last post. When the government runs a deficit, it reliably runs subsequent surpluses that partially repay some of the accumulated debt. The surplus is not an AR(1)! It has an s-shaped response function.

So if you want a realistic fiscal theory model, you need a surplus with an s-shaped response function, but you need to keep "active" fiscal policy. This combination is the central innovation of the paper.

Wednesday, February 5, 2020

New Paper -- the fiscal roots of inflation

I recently finished drafts of a few academic papers that blog readers might find interesting. Today, "The Fiscal Roots of Inflation."

The government debt valuation equation says that the real value of nominal debt equals the present value of surpluses. So, when there is inflation, the real value of nominal debt declines. Does that decline come about by lower future surpluses, or by a higher discount rate? You can guess the answer -- a higher discount rate.

Though to me this is interesting for how to construct fiscal theory models in which changes in the present value of government debt cause inflation, the valuation equation is every bit as much a part of  standard new-Keynesian models. So the paper does not take a stand on causality.

Here is an example of the sort of puzzle the paper addresses. Think about 2008. There was a big recession. Deficits zoomed, through bailout, stabilizers, and deliberate stimulus. Yet inflation.. declined. So how does the government debt valuation equation work? Well, maybe today's deficits are bad, but they came with news of better future surpluses. That's hard to stomach. And it isn't true in the data. Well, real interest rates declined and sharply. The discount rate for government debt declined, which raises the value of government debt, even if expected future surpluses are unchanged or declined. With a lower discount rate, government debt is more valuable. If the price level does not change, people want to buy less stuff and more government debt. That's lower aggregate demand, which pushes the price level down. Does this story bear out, quantitatively, in the data? Yes.

If you don't like discount rates and forward looking behavior, you can put the same observation in ex-post terms. When there is a big deficit, the value of debt rises. How, on average, does the debt-GDP ratio come back down on average? Well, the government could run big surpluses -- raise taxes, cut spending to pay off the debt. That turns out not to be the case. There could be a surge of economic growth. Maybe the stimuluses and infrastructure spending all pay off. That turns out not to be the case. Or, the real rate of return on government bonds could go down, so that debt grows at a lower rate. That turns out to be, on average and therefore predictably, the answer.


OK, to work. The paper starts by developing a Cambpell-Shiller type identity for government debt. This works also for arbitrary maturity structures of the debt. Corresponding to the Campbell-Shiller return linearization, $$ \rho v_{t+1}=v_{t}+r_{t+1}^{n}-\pi_{t+1}-g_{t+1}-s_{t+1}. $$ The log debt to GDP ratio at the end of period \(t+1\), \(v_{t+1}\), is equal to its value at the end of period \(t\), \(v_{t}\), increased by the log nominal return on the portfolio of government bonds \(r_{t+1}^{n}\) less inflation \(\pi_{t+1}\), less log GDP growth \(g_{t+1}\), and less the real primary surplus to GDP ratio \(s_{t+1}\). Surpluses, unlike dividends, can be negative, so I don't take the log here. This surplus is scaled to have units of surplus to value, so a 1% change in "surplus" changes the log value of debt by 1%. I use this equation to measure the surplus.

Iterating forward, and imposing the transversality condition, we have a Campbell-Shiller style present value identity, $$ v_{t}=\sum_{j=1}^{\infty}\rho^{j-1}s_{t+j}+\sum_{j=1}^{\infty}\rho^{j-1}g_{t+j} -\sum_{j=1}^{\infty}\rho^{j-1}\left( r_{t+j}^{n}-\pi _{t+j}\right). $$ Take innovations \( \Delta E_{t+1} \equiv E_{t+1}-E_t \) and we have $$ \Delta E_{t+1}\pi_{t+1}-\Delta E_{t+1} r_{t+1}^{n}= -\sum_{j=0}^{\infty} \rho^{j} \Delta E_{t+1}s_{t+1+j} -\sum_{j=0}^{\infty} \rho^{j} \Delta E_{t+1} g_{t+1+j}+\sum_{j=1}^{\infty} \rho^{j} \Delta E_{t+1}\left( r_{t+1+j}^{n}-\pi_{t+1+j}\right) $$ Unexpected inflation devalues bonds. So it must come with a decline in surpluses, a rise in the discount rate, or a decline in bond prices. Notice the value of debt disappeared, which is handy.

The bond return comes from future expected returns or inflation, so it's nice to get rid of that too. With a geometric maturity structure in which the face value of bonds of \(j\) maturity is \(\omega^j\), a high bond return today must come from lower bond returns in the future. $$ \Delta E_{t+1}r_{t+1}^{n} = -\sum_{j=1}^{\infty}\omega^{j}\Delta E_{t+1} r_{t+1+j}^{n} =-\sum_{j=1}^{\infty}\omega^{j}\Delta E_{t+1}\left[ (r_{t+1+j}^{n}-\pi_{t+1+j})+\pi_{t+1+j}\right] $$ Substitute and we have the last and best identity $$ \sum_{j=0}^{\infty}\omega^{j} \Delta E_{t+1}\pi_{t+1+j} = -\sum_{j=0}^{\infty} \rho^{j} \Delta E_{t+1}s_{t+1+j} -\sum_{j=0}^{\infty} \rho^{j} \Delta E_{t+1}g_{t+1+j} +\sum_{j=1}^{\infty} (\rho^{j} -\omega^{j})\Delta E_{t+1}\left( r_{t+1+j}^{n}-\pi_{t+1+j}\right) . $$ With long-term debt a weighted sum of current and future inflation corresponds to changes in expected surpluses and discount rates. A fiscal shock can result in future inflation, thereby falling on today's long term bonds. Equivalently, a surprise deficit today \(s_{t+1}\) must be met by future surpluses, by lower returns, or by devaluing outstanding bonds, so that the debt/GDP ratio is reestablished.


I ran a VAR and computed the responses to various shocks.

Here is the response to an inflation shock - -an unexpected movement \(\Delta E_1 \pi_1\). All other variables may move at the same time as the inflation shock.

Inflation is persistent, so a 1% inflation shock is about a 1.5% cumulative inflation shock, weighted
by the maturity of outstanding debt.

So, where is the 1.5% decline in present value of surpluses? Which terms of the identity matter?
Inflation does come with persistent deficits here. The sample is 1947-2018, so a lot of the inflation shocks come in the 1970s. You might raise three cheers for the fiscal theory, but not so fast. The deficits turn around and become surpluses. The sum of all surpluses term in the identity is a trivial -0.06, effectively zero. These deficits are essentially all paid back by subsequent surpluses.

Growth declines by half a percentage point cumulatively, accounting for 2/3 of the inflation. And the discount rate rises persistently. Two thirds of the devaluation of debt that inflation represents comes from higher real expected returns on government bonds, which in turn means higher interest rates that don't match inflation. (More graphs in the paper.)

Growth here is negatively correlated with inflation, which is true of the overall sample, but not of the story I started out with. What happens in a normal recession, that features lower inflation and lower output? Let's call it an aggregate demand shock. To measure such an event, I simply defined a shock that moves both output and inflation down by 1%. Here are the responses to this "recession shock."
 Inflation and output go down now, by 1%, and by construction. That's how I defined the shock. This is a recession with low growth, low inflation, and deficits. Not shown, interest rates all decline too.

So where does the low inflation come from in the above decomposition. Do today's deficits signal future surpluses? Yes, a bit. But not enough -- the cumulative sum of surpluses is -1.15% On its own, deficits should cause 1% inflation, the fiscal theory puzzle that started me out in this whole business. Growth quickly recovers, but is not positive for a sustained period. Like 2008, we see a basically downward shift in the level of GDP. That contributes another 1% inflationary force. The discount rate falls however,  so strongly as to raise the real value debt by almost 5 percentage points! That overcomes the inflationary forces and accounts for the deflation.

Here is a plot of the interest rates in response to the same shock. i is the three month rate, y is the 10 year rate, and rn is the return on the government bond portfolio. Yes, interest rates at all maturities jump down in this recession. Sharply lower rates mean a one-period windfall for the owners of long term bonds, then expected bond returns fall too.

The point 

Discount rates matter. If you want to understand the fiscal foundations of inflation, you have to understand the government debt valuation equation. Inflation and deflation over the cycle is not driven by changing expected surpluses. If you want to view it "passively," inflation and deflation over the cycle does not result in passive policy accommodation through taxes, as most footnotes presume. The fiscal roots (or consequences) of inflation over the cycle are the strong variation in discount rates -- expected returns.

The fiscal process

Notice that the response of primary surpluses in all these graphs is s-shaped. Primary surpluses do not follow an AR(1) type process. In response to today's deficits, there is eventually a shift to a long string of surpluses that partially repay much though not all of that debt. This seems completely normal, except that so many models specify AR(1) style processes for fiscal surpluses. Surely that is a huge mistake. Stay tuned. The next paper shows how to put an s-shaped surplus process in a model and why it is so important to do so.

Comments on the paper are most welcome.

Free Market Health Care

There exists a Free Market Medical Association

Some quotes from the website:
.... innovation in healthcare can only happen when a buyer and a seller are able to business transparently and fairly.
The free market movement in healthcare is gaining steam. ...
Matching a willing buyer with a willing seller of valuable healthcare services is the goal of everyone involved in this movement. We help identify patients willing to pay cash, doctors willing to list their prices, businesses attempting to provide affordable quality insurance, and providers/services/and patient advocates that are helping make everything work.
The Free Market works when there is freedom of choice:
Willing buyer
Willing seller
Market clearing price
The association seems to be mostly a marketing platform plus a bit of information and advocacy.

In the words of the inimitable Ron Swanson of Parks and Recreation,
“Whatever happened to “Hey, I have some apples, would you like to buy them?” “Yes, thank you!” That’s as complicated as it should be to open a business in this country.”
I feel like a SETI researcher who finally hears an episode of Gilligan's Island beaming down from Alpha Centauri. I thought I was alone (except Mike Cannon at Cato, John Goodman of the Goodman institute and a few other assorted oddballs like myself -- oh, and the ghost of Milton Friedman of course) to think that a basically free market, including the guaranteed renewable and transferable insurance that a free market would provide, is a practical goal for US health care. Even normally sensible free market economists usually say silly things like "well, the free market is fine for everything else but health is too important to be left to the free market."

There is hope. Common sense people are starting to see the common sense that health care and health insurance need not be the same thing, and that the same cash market by which we pay contractors, tax preparers, lawyers, architects, financial managers, car repairers, plastic surgeons, vets, and other providers of complex services can lie at the basis of health care.  

Tesla Bubble?

Paul Vigna in the Wall Street Journal

Source: Wall Street Journal
"Tesla TSLA -18.51% Inc.’s shares rose 14% Tuesday to $887.06. They have surged 56% in the past week and have nearly quadrupled since early October.  Those outsize gains don’t match Tesla’s more modest fundamentals, which include annual losses."
"They do, however, resemble any number of other assets that have experienced prolonged bubbles, including shares of Qualcomm Inc. and other tech stocks of the dot-com era; oil in 2008 and bitcoin in 2017."
At these prices, Tesla is worth more than Ford and GM combined.

Holman Jenkins:
Tesla can earn a lot more profit per car, and can sell a lot more cars than it does now, and still its stock is priced as if its future profits will be coming from some unnamed something that is not the car-making business.
A correspondent:
I just looked at the minute by minute data for TSLA.  In the last 12 minutes of trading volume was 4.5 million shares, high price was 967, low price (in the last 12 minutes not the day) came 5 minutes later at 860, closed at 887.06.  
Shares outstanding is 180 million so the move from 969 to 860 erased 20 billion of market cap, in five minutes, on no news.  These numbers are so crazy they seem almost meaningless but they make for a good sound byte in a video.
And implicitly (he's more polite)
So Mr. Efficient Market, what do you make of that? 
I can't resist the temptation to plug an old paper, that I have long wanted to return to, "Stocks as Money." I wrote it in response to the internet boom and bust, and the excellent Owen Lamont -Richard Thaler "Can the market add and subtract" in particular. 

This pattern happens over and over (and over and over) again in financial markets. Surely we can do better as an "explanation" than "people are dumb." Or, as Lamont and Thaler put it so nicely,
one needs investors who are (in our specific case) irrational, woefully uninformed, endowed with strange preferences, or for some other reason willing to hold over-priced assets.
Patterns that are repeated over and over again need ether irredeemable human folly -- not much of an "explanation" as it can explain anything -- or economics, a model by which rules of the game produce a strange outcome despite people in the game understanding the game and where it ends. That's what "stocks as money" suggested.

Stocks as money points out these events do not happen in isolation. High prices are only one symptom. They always occur with 1) huge price volatility (check) 2) huge share turnover (check) 3) impediments to short-selling, especially at a longer horizon (check, more below)  4) in an asset where there is a lot of disagreement, a lot of potential news, a lot of different opinions about long run value. Bubbles do not happen in regulated public utility stocks.

"People are dumb and will pay too much for flashy stuff" does not explain why they should, a week later, change their minds and sell. It does not explain why high prices only happen with the other four.

So why would anyone buy Tesla?

Tuesday, February 4, 2020

Wokeademia spreads

In my first and second posts on "diversity statements," I discovered how these political loyalty oaths are now required by the University of California and the National Institutes of Health. 

In a quick look at academicjobsonline I discovered that this cancer has metastasized even further. "Diversity statements," professions of loyalty to the "diversity" cause, and testimonials about one's past commitment to "diversity" efforts pervade academic jobs postings. This is not just a requirement imposed by a nebulous bureaucracy, as I had assumed. It is deeply embedded in each department's recruiting, with therefore the active participation of faculty. 

At the cost of repetition, let me be clear about this sensitive issue. 

Universities started with a desire to hire African Americans, women, and other groups, to address the sadly small numbers of these on their faculties. Racial and gender discrimination being illegal, this was soon labeled a "diversity" effort. But for a long time "diversity" meant only who you hire, not their politics. 

The "diversity statement" is a new effort, in which every potential faculty member must pledge their personal loyalty to the diversity movement, and pledge future activity.  They also must describe their personal experiences advancing "diversity." And they must not mention ideological or other diversity. 

In part, as documented in my first post and references, this has simply been a way to more effectively impose illegal racial and gender quotas. 
The part I object to in these posts is the "diversity statement," and the activity it commands. This statement is a clearly political oath, and squashes ideological diversity. Republicans are a lot rarer on college faculty than any racial or sexual group! 

This post is not about the desirability of seeing more under-represented groups in academia. It is not about the previous "diversity" regime which mostly amounted to spending a lot more time making sure one had examined all potential candidates from under represented groups, and documented such to upper administration. We can discuss those another day. The point here is only about the diversity statement, and the requirement to bend ones research, political support and activity to its cause.

Here is a brief sampling of current job postings (it's a little late in the season, so the pickings are slim. I'll look again in the fall. All emphasis in italics are mine. Major news below, Cornell seems to have the same institution-wide diversity pledge requirement as the UC system. 


Position: Assistant Professor of History  

Required Qualifications:
Ph.D. in History with specialization in Modern World history, with an emphasis in either the African Diaspora, the Islamicate, or South Asia 
Demonstrated commitment to working successfully with a diverse student population 

Preferred Qualifications:
...Evidence of support for and/or experience related to the University’s strong commitment to the academic success of its diverse student body ...

...enthusiastically support the University’s strong commitment to the academic success of all of our students, including students of color, students with disabilities, students who are first generation to college, veterans, students with diverse socio-economic backgrounds, and students of diverse sexual orientations and gender expressions. 

How to Apply - Required Documentation:
An Equity and Diversity Statement about your teaching or other experiences, successes, and challenges in working with a diverse student population (maximum two pages, single-spaced)....

(Cal state Long Beach has lots of job postings at the moment, all with this language, so it does come from upper administration, but with the consent of the departmental faculty.) 


Purdue University, History Department
Position Title: Assistant Professor of History
Position Description: Tenure Track Assistant Professor in Military History / History of the American Civil War Era 

Monday, February 3, 2020

Boot Camp

The Hoover Institution will host another "Policy Boot Camp" August 16-22. See here for details and how to apply. It's a one-week survey of serious policy analysis.

The program includes  economists such as John Taylor, Ed Lazear, Amit Seru, Caroline Hoxby, Erik Hurst, and yours truly. Learn about international affairs from H.R. McMaster, Jim Mattis and  Condoleezza Rice. Niall Ferguson on Nationalism vs. Globalism and Bjorn Lomborg on climate should be worth it all on their own. And many more.

It's designed for "college students and recent graduates," but I think that is a bit elastic. Food and lodging free.

Update: in response to a commenter. Yes, PhD students and even those a year or two out are welcome. 

Online Asset Pricing back again!

My online Asset Pricing course is back again, after one more software/administrative change once again threatened its demise.  It's still on Canvas, but you have to ask to sign on.

The course is here, University of Chicago Canvas course 23303. To log in and use it, you need to email  The course is open to anyone, not just University of Chicago students. If that doesn't work, email me john dot cochrane at stanford dot edu, and I'll see what's wrong.

The videos, notes, and other materials are still available ungated on my website, here, under the "Asset Pricing" tab.

If all goes well you see this:

Economic note: It's interesting how software depreciates so rapidly, though its physical being depreciates not at all. Perfectly good software stops working as operating systems and machines get "upgraded," as IT departments seem to latch on to new "solutions" every three years, and so forth. Most of my email from before the mid 2000s is gone due to an "upgrade." My website is in the midst of an "upgrade" crisis, and I can't seem to keep the online class going for more than two or three years. There is an interesting economics paper in this. As son of a historian, I feel for the historians of a few hundred years from now who, looking back on our interesting era, will find a blank void, as all of our records are unreadable.