Yellen: Never Said I Favor Running High-Pressure Economy

The transcript discusses the potential of using fiscal policy to run a high pressure economy, aiming to repair labor market damage from a recession. It questions the risks of fiscal approaches and explores whether a strong labor market can permanently increase labor force participation. The speaker clarifies they do not advocate for a high pressure economy but highlights the importance of research in understanding labor market dynamics. Economic projections show modest unemployment undershooting, with a focus on maintaining inflation near 2%. The future outlook involves examining labor market experiences to adjust economic views.

What is the main goal of running a high pressure economy according to the first section?

• To draw more people into the workforce

• To increase exports

• To reduce taxes

• To increase government spending

In the second section, what does the speaker emphasize about the high pressure economy?

• It is a guaranteed way to boost the economy

• It is not related to labor market changes

• It requires careful research to understand its effects

• It should be implemented immediately

What does the speaker clarify about their stance on running a high pressure economy?

• They believe it is unnecessary

• They think it should be avoided at all costs

• They have never recommended it as an experiment

• They fully support it as an experiment

According to the third section, what is the policy stance on inflation objectives?

• To always overshoot the 2% objective

• To maintain a balance between undershooting and overshooting

• To focus solely on unemployment rates

• To ignore inflation objectives

What is the expected outcome of maintaining a balanced inflation policy as discussed in the third section?

• Higher taxes

• Reduced economic growth

• A stable labor market with more participation

• Increased government debt