Aim Quote by Janet Yellen
“If strong economic conditions can partially reverse supply-side damage after it has occurred, then policymakers may want to aim at being more accommodative during recoveries than would be called for under the traditional view that supply is largely independent of demand.”
About This Quote
Source Speech: Economic Policy Forum, 2023
During recoveries, policymakers should consider easing policies more than traditional models suggest, because demand can aid supply restoration.
In simple terms: Accommodative policy can help repair supply after shocks.
Use flexible policy to support supply recovery.
Themes
Mood
Type
When to use this quote
- fiscal policy design
- central bank strategy
- economic forecasting
Key Concepts
Questions to Reflect On
- When should policy shift from accommodative to restrictive?
- How does demand influence supply health?
Too much accommodation may fuel inflation.