Bradley Lecture: Stanford’s John Cochrane Examines the Roots of Inflation and the Path Forward

Dr. John H. Cochrane, the Rose-Marie and Jack Anderson Senior Fellow at the Hoover Institution at Stanford University, was the featured economic expert at the June 11 Bradley Lecture.

In a compelling and timely lecture, Dr. John H. Cochrane—Rose-Marie and Jack Anderson Senior Fellow at the Hoover Institution at Stanford University—offered a clear and direct analysis of today’s inflationary challenges, connecting government spending, fiscal policy, and long-term growth in a way that resonated with both economists and engaged citizens.

Speaking to a packed audience as part of the Lubar College of Business’ Bradley Distinguished Lecture Series, Cochrane focused on how massive federal spending during the COVID-19 pandemic—and a lack of planning for repayment—was the key driver of recent inflation. “We printed up $3 trillion, borrowed $2 trillion, and sent people checks. Duh—they went out and spent it. And you get inflation,” he said, distilling a complex issue with clarity and wit.

Cochrane challenged the idea that inflation was caused mainly by supply shocks or corporate greed. Instead, he pointed to what he calls the “fiscal theory of the price level”: the idea that inflation results when people lose confidence that the government will cover its debt through future taxes or spending reductions. “In the end, what counts is the government’s ability to soak up extra money through extra taxes in excess of spending—either now or in the future,” he explained.

While the Federal Reserve eventually responded with interest rate hikes, Cochrane argued that the delay made the economic pain worse. “The Fed should have done this much quicker than it did,” he said. “We would have had a small, steady inflation—at least until fiscal policy came to its senses.”

Looking ahead, Cochrane cautioned that the U.S. cannot continue to rely on unsustainable borrowing to address crises. He warned of the risks to long-term fiscal credibility if future economic shocks, such as geopolitical conflicts or financial instability, are again met with unchecked spending. “Our government solves every economic problem with a river of borrowed money. Sorry—that’s got to end.”

Beyond inflation, Cochrane urged policymakers to prioritize long-term economic growth through productivity and innovation. “The most important economic issue is growth,” he said. “Almost all public policy slows it down. But if we focus on fixing the incentives—even modestly—we can unlock real progress.”

The Bradley Distinguished Lecture Series brings leading voices in economics and public policy to Milwaukee to foster dialogue on the nation’s most pressing issues. Dr. Cochrane’s presentation offered a thoughtful, data-driven perspective on inflation—and a reminder that sound policy requires both understanding and discipline.

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