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If unemployment is the cure for inflation who pays the price? (infosec.pub)

submitted 1 day ago by arbilp3@aussie.zone to c/australianpolitics@aussie.zone

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Must be those poor, poor fossil fuel corporations, that's why govt subsidies are never enough 🤑

https://thepoint.com.au/opinions/260311-if-unemployment-is-the-cure-for-inflation-who-pays-the-price

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[–] Eyekaytee@aussie.zone 0 points 1 day ago* (last edited 1 day ago) (1 children)

ok but how would that bring down country wide inflation?

Sorry I had to use mistral AI on my PC to generate this because I cbf explaining

Unemployment and inflation are inversely related in the short term due to the Phillips Curve—when demand for labour rises (lowering unemployment), wages and prices often increase, fuelling inflation. Conversely, high unemployment typically suppresses wage growth and spending power, reducing inflationary pressures.

If you're actually interested there's a whole article on it here

https://www.investopedia.com/articles/markets/081515/how-inflation-and-unemployment-are-related.asp

tldr taxing the richest 1% wouldn't take a bundle of money out of the economy, and it especially wouldn't take inflation out of things regular people buy, like groceries and take away because it's not something the ultra rich have an impact on anyway

Here's Australias latest CPI: https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release

[–] MisterFrog@aussie.zone 4 points 1 day ago

It would be stupidly unpopular, but I actually think there should be some legislated amount the RBA then could regulate how much taxes go up and down. (Including income and/or corporate taxes)

Starting with the top tax brackets, and in extreme cases going further down tax brackets.

How this would work in practice, since tax is calculated annually, I dunno.

Bur it's patently insane we expect the RBA to control inflation and unemployment with so few tools.

Interest rate and quantitative easing/tightening, that's pretty much it, right?