The disequilibrium theory developed by Barro-Grossman (1976), Malinvaud (1985), Muellbauer-Portes (1978) etc has contributed toward elaborating the theory of unemployment. Malinvaud expanded the static version of disequilibrium theory into dynamic one. He asserts that Keynesian unemployment is lasting, whereas classical unemployment is transient by nature. His analysis of the assertion, however, is incomplete in part.
In this paper, we examine Malinvaud's assertion by using a generalized dynamic model. This model clalifies the dynamic movement of the system through the regimes of Keynesian unemployment, classical unemployment and repressed inflation. We find that whether Malinvaud's assertion holds true or not depends on the size of potential exess demand in goods markets and the relative regidities of prices and wages.