Customer Quote by Janet Yellen
“We need to keep in mind the well-established fact that the full effects of monetary policy are felt only after long lags. This means that policy makers cannot wait until they have achieved their objectives to begin adjusting policy.”
About This Quote
Source Speech: Remarks at Economic Forum, 2023
Monetary policy impacts are delayed, so policymakers must act proactively, not reactively after goals are met.
In simple terms: Policy effects lag, so act early.
Key Takeaway
Adjust policy before outcomes appear.
Themes
economics
policy
timing
Mood
cautious
analytical
Type
policy
economic
When to use this quote
- central bank meetings
- budget planning
- inflation control
- interest rate decisions
Key Concepts
monetary lag
proactive governance
Questions to Reflect On
- How can we better predict lag length?
- What safeguards prevent premature adjustments?
A Different Perspective
Lagged effects can cause overshoot if not carefully calibrated.
