Long-term inflation can affect unemployment in a non-linear way, meaning it has different effects depending on the situation. Anticipated inflation is linked to higher unemployment rates and more unstable job markets. The relationship between inflation and unemployment is stronger when unemployment is already high. This connection is due to how inflation impacts the value of worker-firm matches, making them more sensitive to changes in productivity or further increases in inflation. The cost of inflation on overall well-being increases as inflation levels rise and when there are big economic shocks happening.