5  This tells us that South Africa’s Phillips curve is near-vertical at a low rate of positive economic growth.6  This is strong evidence that the basic job creation mechanism is being impeded by things other than aggregate demand.
This adverse relationship between policy expansion and inflation kicks in when employment levels rise above what is called the non-accelerating inflation rate of unemployment, or NAIRU. Evidence for South Africa shows that this happens when our unemployment rate is still very high. This is exacerbated by level changes in the NAIRU caused by structural impediments to job creation.