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Please use this identifier to cite or link to this item: http://hdl.handle.net/1959.13/933450

Title
Involuntary unemployment: rehabilitating Keynes' definitions
Author/Creator
Watts, Martin
Institution
The University of Newcastle. Faculty of Business & Law, Newcastle Business School
Description
Keynes' definitions of involuntary unemployment have been criticised by a number of researchers, including Sawyer and Spencer (2008) who argue that the definitions are model specific and can be inconsistent with the presence of unemployment under imperfect competition. This paper argues that their work highlights the problems of retaining an orthodox (real wage) framework to analyse involuntary unemployment. Missing from their analysis is a formal macroeconomic analysis of aggregate demand and supply and a more nuanced treatment of the labour market by treating money wages and prices separately. This paper shows that subject to a small amendment to Keynes' first definition to allow for nonneoclassical specifications of production, the definitions are robust, notwithstanding different configurations of labour demand and supply schedules.
Relation
9th Australian Society of Heterodox Economists (SHE) Conference. Heterodox Economics: Addressing Perennial and New Challenges: Proceedings of the 9th Australian Society of Heterodox Economists (SHE) Conference (Sydney 6-7 December, 2010) p. 292-306
Relation
http://www.asb.unsw.edu.au/research/societyofheterodoxeconomists/SHEconference/Pages/pastconferences.aspx
Date
2010
Publisher
University of New South Wales (UNSW)
Keyword(s)
aggregate demand;  involuntary unemployment;  wage flexibility;  labour demand
Resource Type
conference paper
Identifier
http://hdl.handle.net/1959.13/933450
Identifier
ISBN:9780733429576
Reviewed
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"Involuntary unemployment: rehabilitating Keynes' definitions"
 
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