In the long run, the level of output and employment in the economy depends on factors other than monetary policy. These include technology and people's preferences for saving, risk, and work effort. But the economy goes through business cycles in which output and employment are above or below their long-run levels. Even though monetary policy can't affect either output or employment in the long run, it can affect them in the short run. Persistent attempts to expand the economy beyond its long-run growth path will press capacity constraints and lead to higher and higher inflation, without producing lower unemployment or higher output in the long run.
High inflation can hinder economic growth.
For example, when inflation is high, it also tends to vary a lot, and that makes people uncertain about what inflation will be in the future. High inflation also hinders economic growth in other ways. For example, because many aspects of the tax system are not indexed to inflation, high inflation distorts economic decisions by arbitrarily increasing or decreasing after-tax rates of return to different kinds of economic activities. In addition, it leads people to spend time and resources hedging against inflation instead of pursuing more productive activities. Although monetary policy cannot expand the economy beyond its potential growth path or reduce unemployment in the long run, it can stabilize prices in the long run.