system
Given the following post, respond as if you're commenting on Reddit:
human
Higher inflation increases employment because it stimulates demand or because real wages are lower?
gpt
In the standard macro models, higher inflation doesn't  increase aggregate demand, the opposite is true in fact, it tends to reduce demand. Demand may fall because of the lower real value of savings, lower real wages, a reduction in the real size of the money supply, or because the central bank raises real interest rates in response to higher inflation.

Higher inflation is associated with higher demand, but the causation is likely to be the other way.  Increased demand causes firms to raise prices, leading to higher inflation.