ABSTRACT
Severe theoretical and political controversies burst out only when the new cyclical upswing which started at the end of 1975 had gone on for a while without reducing but merely stabilizing the high level of unemployment. During the 1960s and early 1970s - for one and a half decades - Germany experienced unemployment rates only slightly fluctuating around an average of.7/.8 percent with the single exception of 1967/68. The rapid increase of unemployment and the growing doubts of employees as to the security of their jobs induced households to expand their savings rate so that even private consumption failed to support aggragate product demand considerably. The old-fashioned view that lasting unemployment must be voluntary, supposed to be dead for a long time, has found a seemingly fresh foundation in job search theories. The “new microeconomic theory” has its merits, but it can never be developed into a general theory of unemployment as is claimed by many of its advocates.
