{"id":17375,"date":"2025-06-19T16:29:23","date_gmt":"2025-06-19T21:29:23","guid":{"rendered":"https:\/\/uwm.edu\/business\/?p=17375"},"modified":"2026-02-16T10:50:45","modified_gmt":"2026-02-16T16:50:45","slug":"bradley-lecturestanfords-john-cochrane-examines-the-roots-of-inflation-and-the-path-forward","status":"publish","type":"post","link":"https:\/\/uwm.edu\/business\/bradley-lecturestanfords-john-cochrane-examines-the-roots-of-inflation-and-the-path-forward\/","title":{"rendered":"Bradley Lecture: Stanford’s John Cochrane Examines the Roots of Inflation and the Path Forward"},"content":{"rendered":"\n

In a compelling and timely lecture, Dr. John H. Cochrane<\/strong>\u2014Rose-Marie and Jack Anderson Senior Fellow at the Hoover Institution at Stanford University\u2014offered a clear and direct analysis of today\u2019s inflationary challenges, connecting government spending, fiscal policy, and long-term growth in a way that resonated with both economists and engaged citizens.<\/p>\n\n\n\n

Speaking to a packed audience as part of the Lubar College of Business\u2019 Bradley Distinguished Lecture Series<\/strong>, Cochrane focused on how massive federal spending during the COVID-19 pandemic\u2014and a lack of planning for repayment\u2014was the key driver of recent inflation. \u201cWe printed up $3 trillion, borrowed $2 trillion, and sent people checks. Duh\u2014they went out and spent it. And you get inflation,\u201d he said, distilling a complex issue with clarity and wit.<\/p>\n\n\n\n

Cochrane challenged the idea that inflation was caused mainly by supply shocks or corporate greed. Instead, he pointed to what he calls the \u201cfiscal theory of the price level\u201d: the idea that inflation results when people lose confidence that the government will cover its debt through future taxes or spending reductions. \u201cIn the end, what counts is the government\u2019s ability to soak up extra money through extra taxes in excess of spending\u2014either now or in the future,\u201d he explained.<\/p>\n\n\n\n

While the Federal Reserve eventually responded with interest rate hikes, Cochrane argued that the delay made the economic pain worse. \u201cThe Fed should have done this much quicker than it did,\u201d he said. \u201cWe would have had a small, steady inflation\u2014at least until fiscal policy came to its senses.\u201d<\/p>\n\n\n\n

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. \u201cOur government solves every economic problem with a river of borrowed money. Sorry\u2014that\u2019s got to end.\u201d<\/p>\n\n\n\n

Beyond inflation, Cochrane urged policymakers to prioritize long-term economic growth through productivity and innovation. \u201cThe most important economic issue is growth,\u201d he said. \u201cAlmost all public policy slows it down. But if we focus on fixing the incentives\u2014even modestly\u2014we can unlock real progress.\u201d<\/p>\n\n\n\n

The Bradley Distinguished Lecture Series brings leading voices in economics and public policy to Milwaukee to foster dialogue on the nation\u2019s most pressing issues. <\/strong>Dr. Cochrane\u2019s presentation offered a thoughtful, data-driven perspective on inflation\u2014and a reminder that sound policy requires both understanding and discipline.<\/p>\n\n\n\n

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