Also, the deflationary effects of high interest rates are not because it causes unemployment, but because it reduced the rate of increase of the money supply.
Of course, lowered money is recessionary, which leads to unemployment which puts downward pressure on wages; but wages aren't the reason for inflation - the increase in monetary mass is.
This part I have small nitpick about:
> Also, the deflationary effects of high interest rates are not because it causes unemployment, but because it reduced the rate of increase of the money supply.
It's hard to see how that's not synonymous with increased unemployment, particularly given the oft quoted Phillips curve and the NAIRU.