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 are the potential risks associated with running an expansionary fiscal policy?

How might a high pressure economy help repair damage done to the labor force during a recession?

What factors might lead to changes in the labor force participation rate in a strong labor market?

Why is it important to avoid a persistent undershoot of the 2% inflation objective?

What are the implications of a labor market that attracts more people off the sidelines?