US Treasury’s Yellen calls for better automatic stabilizers to fight recessions

WASHINGTON: US Treasury Secretary Janet Yellen on Thursday called for a modernization of the US unemployment insurance system, with more effective automatic stabilizers that speed assistance to workers who lose jobs or income when recessions hit.

Yellen, in remarks to the Brookings Institution in Washington, said that recent recessions, including the 2020 COVID-19 crisis, show that rapid receipt of cash assistance is important for workers who have lost income. But more study is needed to pinpoint when and how that cash should be delivered, she added.

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“Every recession in recent decades has reinforced the need for a flexible, automatic response. Well-designed automatic stabilizers are the best remedy,” Yellen said in prepared remarks.