Yellen's academic research has focused extensively on what her Fed biography describes as the “causes, mechanisms, and implications of unemployment.” She views fostering job growth and reducing long-term unemployment as top priorities for the Fed, especially in nudging along the economic recovery.
“Policy makers should be compelled to take action given the serious costs of long-term unemployment when overall unemployment is already high,” she wrote in a 2004 paper with her husband. “A week of unemployment is worse when it is experienced as part of a longer spell.”
She was a major influence in creating the Fed’s third round of quantitative easing, which was specifically targeted at lowering unemployment by reducing interest rates. And the job market should be the chief determining factor in scaling back those purchases, she says.
