“ The purpose of raising interest rates is to "cool the economy," a euphemism for increasing unemployment and reducing wages.” My suspicion is wages are alread

“ The purpose of raising interest rates is to "cool the economy," a euphemism for increasing unemployment and reducing wages.” My suspicion is wages are already below the market clearing rates. Ie if they were raised more people would be willing to work. That’s easiest to see as a minimum wage consideration, but it’s true of more market industries than that. I don’t see a way where raising interest rates causes labor to be paid more. If it works to lower wages then peoples propensity to work for those wages will go even lower. At some point possibly externals to the traditional labor market start emerging. Ie despite having paid for your BigMac the laborer won’t actually make you a decent BigMac until they see a tip in the jar. (Just to illustrate the mechanism not as an actual example.) I honestly don’t know. But it’s clear we’re in odd territory.