I am having a hard time on understanding the concept. I have minimal knowledge on economics and I am seeking here for an explanation about this. Thank you people.
In: Economics
It’s hard to give an ELI5 answer, because that difference is somewhat the whole point of Keynesian economics. Moreover, “Keynesian” can mean a lot of different things–what Keynes said, the historical Keynesian school, Post-Keynesians, Neo-Keynesians, and I’m probably missing some. And of these, the Neo-Keynesian flavor is the only one somewhat consistently taught in economics programs.
My stab at it: full employment is always “all people who are willing to work at the current market salary have a job”, the difference is whether or not the market gets there on its own.
In classical economics, anyone who wants a job at the current market salary can get one. If anyone doesn’t have a job, it’s because they don’t want to work at the current market salary (i.e. they are voluntarily unemployed).
Keynes went “dude, just take a look out there, people can’t find jobs and that’s not because they’re too greedy or lazy”. His theory is that demand drives the economy and therefore full employment often requires that the government boosts the demand; otherwise, you have involuntary unemployment.
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