Keynesian economists hold it to be self-evident that business cycles are characterized by involuntary unemployment. But construction of a model of the cycle with involuntary unemployment faces the obvious difficulty of explaining why the labor market does not clear. Involuntarily unemployed people, by definition, want to work at less than the going wage rate. Why don't firms cut wages, thereby increasing profits? This paper survays a recent literature which offers a convincing and coherent explanation why firms may find it unprofitable to cut wages in the presence of involuntary unemployment. Section 1 and 2 in this paper describe some of the general implications of the Efficiency Wage Hypothesis and the Hysteresis Theory in their simplest forms.