Baku. Musa Ahmadov - APA-Economics. Janet Yellen is working a very difficult environment. She’s been open about the fact that there are limit sin monetary policy. What we need is fiscal policy, but it has not been forthcoming, Nobel prize-winning economist Joseph Stiglitz told Business Insider.
According to him, Yellen has been the first chair of almost any central bank to point out that what the Fed does has an effect on inequality and inequality of opportunity: “I think Fed policies have, QE has led to more – wealth inequality in the United States. When the interest rates are lowered to zero, it hurts people who are retiree. So, QE was not their intent, has had the effect of increasing inequality. There are inflation hawks and on the other hand, the board is now, I think, at least has several people who worry about unemployment and she’s one of those. And so overall, she’s done a good job of keeping at bay the inflation hawks. There’s only been one increase in the interest rate. AS I look at the American economy, the risk of inflation remains very remote and the persistence of unemployment remains very real. And let me explain a little bit about unemployment because some people look at the 4% and 5% unemployment and say: Isn’t that really good performance? The answer is the labour market is still very week. Evidence - the fact that wages are barely keeping up with inflation, the low labour force participation. There is a lot of disguised unemployment if you look at those who are holding job part-time involuntarily, the number of people in disability. So, all that gives me the view is that on balance she’s been able to maintain difficult politics”.
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