Involuntary Unemployment. Unravelling the Conceptual Muddles

The aim of this paper is to disentangle four main acceptations of the unvoluntary unemployment concept, to be found in the literature. The will be dubbed respectively as unvoluntary unemployment à la Keynes, à la Modigliani, à la Azariadis and à la Haavelmo (or, alternatively, Keynes-, Modigliani-, Azariadis- and Haavelmo-underemployment). In a first part, Keynes’s kaleidoscopic understanding of the concept is recalled. A second part discusses the (negative) role which Modigliani-underemployment has played in the first generation of Keynesian models. Part three ponders on the claim, put forward by new classicists, that unvoluntary unemployment à la Keynes is unacceptable within the neo-Walrasian research program. Part four examines the new Keynesian retort to this criticism and the two new acceptations it has brought about, namely Azariadis- and Haavelmo- underemployment.