Lucas on involuntary unemployment
The aim of this paper is to examine critically Lucas' arguments against Keynes's General Theory and in particular against Keynes's concept of involuntary unemployment. It comprises two main parts. In the first part of the paper, the author questions Lucas's claim that Keynes betrayed the equilibrium discipline by freeing himself from the postulates of optimising behaviour and market clearing. In the second part, Lucas' three arguments against the involuntary unemployment concept are discussed--first, that there is no rationale for drawing a distinction between two sorts of unemployment; second, that every economic outcome features the voluntary and the involuntary jointly; and third, that alternatives to unemployment are always present. Copyright 2004, Oxford University Press.
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Volume (Year): 28 (2004)
Issue (Month): 3 (May)
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References listed on IDEAS
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- Michel De Vroey, 2001. "Friedman and Lucas on the Phillips Curve: From a Disequilibrium to an Equilibrium Approach," Eastern Economic Journal, Eastern Economic Association, vol. 27(2), pages 127-148, Spring.
- De Vroey, Michel, 1997.
"Marshall on Equilibrium and Time. A Reconstruction,"
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1997010, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Michel De Vroey, 2000. "Marshall on equilibrium and time: a reconstruction," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 7(2), pages 245-269.
- Michel De Vroey, 1997.
"Involuntary unemployment: the missing piece in Keynes's General Theory,"
The European Journal of the History of Economic Thought,
Taylor & Francis Journals, vol. 4(2), pages 258-283.
- De Vroey, Michel, 1994. "Involuntary Unemployment : The Missing Piece in Keyne's General Theory," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1994011, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Michel De Vroey, 1999. "From Labor Rationing to (Involuntary) Unemployment: A Conceptual Elucidation," Eastern Economic Journal, Eastern Economic Association, vol. 25(3), pages 315-330, Summer.
- Donald A. Walker (ed.), 2000. "Equilibrium," Books, Edward Elgar Publishing, volume 0, number 1585, March.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
- Lucas, Robert E, Jr, 1996. "Nobel Lecture: Monetary Neutrality," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 661-82, August.
- Michel De Vroey, 1998. "Is the tatonnement hypothesis a good caricature of market forces?," Journal of Economic Methodology, Taylor & Francis Journals, vol. 5(2), pages 201-221.
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