The logic of Keynes' criticism of the Classical model
Michel Rosier
Abstract
Michel Rosier
Abstract
The Classics' remedy for unemployment was to lower money wages. Keynes opposes this remedy. Therefore, in The General Theory, he aims at building a model in which a fall in money wages may not cause an increase in employment. Most of the interpretations of Keynes identified this aim, but did not attach enough importance to it. Reading The General Theory in the light of this aim, we discover what Keynes' logic of elaboration is, then what Keynes' ideas about voluntary or involuntary unemployment are.
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The Classics' remedy for unemployment was to lower money wages. Keynes opposes this remedy. Therefore, in The General Theory, he aims at building a model in which a fall in money wages may not cause an increase in employment. Most of the interpretations of Keynes identified this aim, but did not attach enough importance to it. Reading The General Theory in the light of this aim, we discover what Keynes' logic of elaboration is, then what Keynes' ideas about voluntary or involuntary unemployment are.
Key concepts: Economics, Keynesian economics, Criticism, Unemployment, General theory, Reading (process), Involuntary unemployment, Full employment