Tiff Macklem and his upside down economics

Just days after that bullish jobs report, Bank of Canada Governor Tiff Macklem endorsed this upside-down view in a speech in Toronto. He elaborated his theory that current inflation is the result of an overheated labour market, “unsustainable” low unemployment, and rising wages. Now Macklem has said the quiet part out loud: unemployment must increase, and he’s going to make it happen. In his Toronto speech, Macklem claimed maximum sustainable employment cannot be observed; we only know we’re below it, if inflation is too high. Never mind that there’s no evidence wages are fuelling inflation: real wages have been falling, and workers’ share of GDP has shrunk.