Yellen Says U.S. in the Vicinity of Full Employment

The transcript discusses how a stronger pace of investment can enhance capital formation, potentially boosting productivity and GDP. It highlights the uncertainty surrounding the magnitude of these effects. Lower marginal tax rates could increase labor supply, though estimates vary. The analysis includes insights from the Joint Committee on Taxation and other analysts. Despite uncertainties, larger impacts on aggregate supply could support GDP growth without necessitating tighter monetary policy. The discussion also touches on the current unemployment rate and its relation to full employment.

In what ways could faster GDP growth be supported in an economy with low productivity growth?

What does the current unemployment rate suggest about the state of employment in the economy?