Involuntary Unemployment, from Keynes to the New Keynesians

The objective of the present study is to reflect upon the evolution of Keynesian theory, by recounting the evolution of ideas regarding the theoretical acceptability of the involuntary unemployment concept. Its first part presents my own reconstruction of the theoretical project Keynes set himself forth in his General Theory. In the second part, I look at the fundamental difficulty encountered with this project. In the third part I argue that the involuntary unemployment result is obtained neither in the General Theory, nor in the standard IS-LM models. The fourth part is devoted to a discussion of Patinkin and Clower's acceptation of involuntary unemployment as well as Barro and Grossman's synthesis of their views. In the fifth part, I evaluate the anti-Keynsian offensive spearheaded by Friedman and Lucas. In the sixth part, I look at the significance of involuntary unemployment in some 'new Keynesian' models.