Higher inflation expectations would in turn lead workers to bargain for commensurate raises in nominal wages to preserve the real value of their earnings. With nominal wages rising as well as prices, firms would no longer have an incentive to hire additional workers, and employment would return to its normal level.
An attempt to stimulate the economy by choosing a permanently higher level of inflation could thus not succeed, according to this analysis; such an attempt would leave the economy with higher inflation but a level of employment no different than it would have been otherwise. This work was both brilliant and prescient.