Involuntary Unemployment: The Case of Serbia and Croatia

This article demonstrates that strong evidence against J.M. Keynes’ “involuntary unemployment” hypothesis and expansion of money supply as a means of ensuring full employment exists even in the worst of economic catastrophes. The presented example of the 1995 exodus of 250,000 refugees from Croatia to Serbia offers evidence that a market consisting of thousands or millions of individuals is rarely devoid of opportunities for beneficial exchanges of goods and services. It is much more likely that these opportunities will be discovered when an individual sees engaging in voluntary exchanges with other individuals as the only means of reaching his or her ends.

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