Whatever Happened to the Concept of Involuntary Unemployment?

Little notice has been taken in recent years of the phenomenon of involuntary unemployment. Neglect of Keynes' concept was understandable during the prosperous 1950s and early 1960s but its neglect since that time reflects the persuasiveness of the marriage which has been effected between the job search models of household behaviour and models of rational expectations responses to inflation. The joining of these models has provided a rationale for the notion that there is an equilibrium level of unemployment toward which the economy tends. This perspective presents several problems which come into focus when the analysis is examined within the framework of Keynes' concept of involuntary unemployment, his perception of the relationship between real and money wages and his labour supply function.