Involuntary Unemployment: Macroeconomics from a Keynesian Perspective by James Anthony Trevithick
Suggestions for economic cures for inflation and unemployment differ widely. For example, the controversy that followed the publication of Keynes' "General Theory" in 1936 was considerable, but not as widely divergent as economic theories are at the present time. How are students to make sense of such a wide diversity of opinion? The author, in considering the answer to this question, states that any answer can only be understood in an historical context and sets out the ways in which dissatisfaction with, for example, Keynes' income-expenditure model's supposed neglect of inflation led to monetarism and how, in turn, suspicions about monetarism being tainted with Keynesian features gave rise to the new classical macroeconomics. Beginning with David Hume in the 18th century, the author describes how ideas rose and fell and developed from each other until the situation of today vis a vis economic theory is seen to be - at least - a logical result of previous thinking. In the final portion of the book, the author draws attention to the distinction between classical and Keynesian unemployment theory, emphasizing that a new category of general unemployment, resulting from excessively high real wages, should be taken into account. He also deals with the recent development of hysteresis - a concept which tries to grapple with the reasons behind the apparent changes in the equilibrium of unemployment.