Fighting inflation doesn’t directly cause unemployment – but that's still the most likely outcome

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You may have seen the news: in its attempts to tackle inflation, the Reserve Bank is going to increase unemployment. The idea can even seem to come right from the mouths of experts, including the bank’s governor, Adrian Orr. Speaking recently to an industry conference, he said:

Returning to low inflation will, in the near term, constrain employment growth and lead to a rise in unemployment.