Relative Wages, Rationality, and Involuntary Unemployment in Keynes's Labor Market

Abstract

The reputation of John Maynard Keynes’s General Theory of Employment, Interest, and Money as a badly written book is often exaggerated. But if it is deserved at all, it is because of parts such as chapter 2, “The Postulates of the Classical Economy.” Half a century of exegesis and interpretation have yet to provide a satisfactory and widely accepted version of what this chapter really means. Reactions to chapter 2 fall into four main strands.