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Comment: Lucas on involuntary unemployment


  • M. G. Hayes


Keynes distinguishes three concepts: voluntary, frictional and (Keynesian) involuntary unemployment. Frictional unemployment is a Classical form of involuntary unemployment (not voluntary, as Lucas suggests), and reflects the Marshallian, rather than Walrasian, treatment of time and equilibrium. Lucas contradicts both Keynes and Pigou in asserting that there are always immediate vacancies for unskilled labour, and abstracts from the very problem that Keynes seeks to address. If voluntary unemployment is re-defined appropriately, as De Vroey helpfully suggests elsewhere, the prefix 'involuntary' is dispensable, not because all unemployment is voluntary, as Lucas would have it, but because it is all involuntary. Copyright 2006, Oxford University Press.

Suggested Citation

  • M. G. Hayes, 2006. "Comment: Lucas on involuntary unemployment," Cambridge Journal of Economics, Oxford University Press, vol. 30(3), pages 473-477, May.
  • Handle: RePEc:oup:cambje:v:30:y:2006:i:3:p:473-477

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    References listed on IDEAS

    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters,in: This Time Is Different: Eight Centuries of Financial Folly Princeton University Press.
    2. Christopher Adam & David Vines, 2009. "Remaking macroeconomic policy after the global financial crisis: a balance-sheet approach," Oxford Review of Economic Policy, Oxford University Press, vol. 25(4), pages 507-552, Winter.
    3. Reinhart, Karmen & Rogoff, Kenneth, 2009. ""This time is different": panorama of eight centuries of financial crises," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 77-114, March.
    4. Patrick Minford, 2010. "The Banking Crisis: A Rational Interpretation," Political Studies Review, Political Studies Association, vol. 8(1), pages 40-54.
    5. Krugman, Paul, 1979. "A Model of Balance-of-Payments Crises," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 11(3), pages 311-325, August.
    6. Dosi, Giovanni & Fagiolo, Giorgio & Roventini, Andrea, 2010. "Schumpeter meeting Keynes: A policy-friendly model of endogenous growth and business cycles," Journal of Economic Dynamics and Control, Elsevier, vol. 34(9), pages 1748-1767, September.
    7. José Gabriel Palma, 2009. "The revenge of the market on the rentiers," Cambridge Journal of Economics, Oxford University Press, vol. 33(4), pages 829-869, July.
    8. Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147, June.
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