Keynes, Lucas and involuntary unemployment: a reply to Hayes

摘要

In this response to Mark Hayes's criticism of his article, 'Lucas on involuntary unemployment', the author insists on the need to draw a distinction between labour rationing (a market outcome) and unemployment (the activity of job seeking). Economic theory is mainly concerned with the former. Yet the issue of the voluntarily versus the involuntarily of unemployment pertains to unemployment as an activity. Failing to make this distinction cannot but lead to semantic confusion.