ABSTRACT
In previous chapters we have considered the many alternative explanations of high unemployment. An important distinction has been made between the natural rate of unemployment and unemployment in excess of that rate. It should now be clear that there is no single explanation of high unemployment. Rather it is the outcome of a multiplicity of factors. Consequently there is no single, simple solution and a successful policy to reduce the current high levels of unemployment will obviously have to take that into account. This is rather a different viewpoint from that which prevailed twenty years ago. Then, most economists viewed unemployment as principally the outcome of controllable fluctuations in aggregate demand. Keynesian demand management policies should be sufficient to eliminate the problem. Of course, policies like special regional measures designed to affect the composition of unemployment were also adopted but the main emphasis was placed on the management of aggregate demand, particularly through the use of fiscal policy.
