Richard Thaler: Yellen Is Doing a Pretty Good Job

The video discusses the behavior of firms, particularly in Silicon Valley, that are hoarding cash due to fear and lack of investment opportunities. It explores the impact of central bank policies, such as low interest rates, on these firms' decisions. The video also delves into the concept of forward guidance from a behavioral economics perspective, highlighting the importance of speeches by figures like Janet Yellen and the need for more research in this area.

What factors contribute to firms sitting on large amounts of cash instead of investing it?

In what ways can fear impact the decision-making processes of companies and governments?

How does the behavior of central banks influence firm investment decisions?

What is the significance of forward guidance in the context of behavioral economics?

What role does Janet Yellen's communication play in shaping market perceptions?