Labour and Employment

The theory of employment is clearly a central question in economic thought. Economists of all traditions and schools have always admitted short run fluctuations in aggregate employment levels associated with the business cycle and explained them with a variety of factors. Yet the central question is, of course, fluctuations around what long run level of employment? Focussing mainly on long-run aspects of employment theory, this paper aims at providing an overview of different theoretical approaches that have been prominent in various phases of the history of economics up to the present. It necessarily summarizes and, hence, simplifies, approaches and debates, but may be useful in clarifying issues that affect current debates and in suggesting that text-book accounts of past authors, including Keynes, may be wrong, or at least highly controversial. It may thus stimulate a renewed interest in past and current economic theories and suggest the possibility of a different angle from which to read past and present controversies.