In the short run, there is no stable aggregate supply curve. The relationship between unemployment and inflation is complex and shifting, not simple nor stable. Instead we focus on a dynamic relationship between the rate of inflation and the rate of growth of GDP, the Friedman Curve. Thus, when expected inflation changes, the Friedman Curve shifts right along with it. These considerations can frustrate macroeconomic policy.
Inflation can wipe out the results of expansionary economic policy.
Disinflation can create a dilemma for policy makers, since it means increased unemployment. Many of the most important events in economics and finance are primarily driven by the surprises. Stock price movements are a case in point. In this case, the surprise is good, even though the news itself is bad. Thanks to the insights of New Classical economists, we now understand a wide range of the most puzzling economic events as being reactions to surprise.