FORTHCOMING IN THE CAMBRIDGE JOURNAL OF ECONOMICS Lucas on Involuntary Unemployment

The aim of this paper is to examine critically Lucas’ arguments against Keynes’s General Theory and in particular against Keynes’s concept of involuntary unemployment. It comprises two main parts. In the first, I question Lucas’s claim that Keynes betrayed the equilibrium discipline by freeing himself from the postulates of optimising behaviour and market clearing. In the second, I discuss Lucas’ three arguments against the involuntary unemployment concept – first, that there is no rationale for drawing a distinction between two sorts of unemployment, second, that every economic outcome features voluntarity and involuntarity jointly and, third, that alternatives to unemployment are always present.