Monetary Policy Tames Monopolistic Wage Setters, Accepts Inflation
The article shows that inflation can be used to control wages and discipline workers in the economy. By setting the right monetary policies, inflation can help keep wages in check and prevent monopolies from taking advantage. This means that having a certain level of inflation is necessary for the economy to function properly. When wages are set by a few powerful groups instead of many individuals, inflation targeting can have real effects on the labor market, regardless of how centralized it is.