The dismissal of ‘involuntary unemployment’ from the lexicon of the modern economist was introduced as part of a deliberate attack on Keynesian economics. It is time to roll back that attack. As I have shown here, ‘involuntary’ unemployment is a useful way of distinguishing unemployment that is part of a social optimum, from unemployment that is not.Ten dogs, nine bones.
It doesn't matter how much job seekers are willing to reduce their offers if there are too few bids for workers. Some workers will be unemployed "involuntarily," the veil of Pareto optimality notwithstanding. And Keynes explained why there are too few jobs for those willing and able to work regardless of wage flexibility.
Lars P. Syll’s Blog
David Andolfatto and the Chicago dismissal of ‘involuntary unemployment’
Lars P. Syll | Professor, Malmo University
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