The role of policy was to manage aggregate demand so as to achieve a preferred combination of outcomes, taking the position of the Phillips curve as given.
Fourth, economic agents base their consumption and investment decisions on their current and expected future income as well as their expectations on future inflation rates. Persistent high inflation alters inflationary expectations and apprehension arising from price uncertainty does lead to cut in spending by individuals and slowdown in investment by corporates which hurts economic growth in the long-run.