Firms don't just try to pay as little as possible to get the needed bodies on board; when there is unemployment, they ask themselves how wage cuts would affect the behavior of the employees. Would they quit or feel dissatisfied and work less hard on the firm's behalf if they feel that wage policies are unfair?
Janet YellenThe bottom line for housing is that the concerns we used to hear about the possibility of a devastating collapseโone that might be big enough to cause a recession in the U.S. economyโwhile not fully allayed have diminished. Moreover, while the future for housing activity remains uncertain, I think there is a reasonable chance that housing is in the process of stabilizing, which would mean that it would put a considerably smaller drag on the economy going forward.
Janet YellenListening to others, especially those with whom we disagree, tests our own ideas and beliefs. It forces us to recognize, with humility, that we don't have a monopoly on the truth.
Janet YellenProductivity growth, however it occurs, has a disruptive side to it. In the short term, most things that contribute to productivity growth are very painful.
Janet Yellen