Conflict over income shares drives inflation, not just unemployment levels.
Unemployment and inflation are usually seen as unrelated, but a new perspective suggests they are connected. Inflation doesn't just depend on the economy's supply side; it can also be influenced by demand and conflicts over income. Factors like the cost of raw materials and productive capacity play a role in driving inflation. This study argues that constraints on the economy's ability to produce goods and services are more important for inflation than just the labor market.