Are labor unions important for business cycle fluctuations? Lessons from Bulgaria

Aleksandar Vasilev

EconStor Open Access Articles and Book Chapters, 2019, vol. 10, issue 1, 143–161

Abstract: In this paper we investigate the quantitative importance of collective bargaining agreements for the observed fluctuations in Bulgarian labor markets. Following Maffezzoli (2001), we introduce a monopoly union into a real-business-cycle model with government sector. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999-2018), and compare and contrast it to a model without unions. We fi nd that the sequential bargaining procedure between the monopoly union and the stand-in rm produces an important internal propagation mechanism within the theoretical setup, which allows the monopoly model to fi t data better than the alternative framework with perfectly-competitive labor markets.

Keywords: business cycles; general equilibrium; labor unions; indivisible labor; involuntary unemployment (search for similar items in EconPapers)
JEL-codes: E24 E32 J23 J51 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Are labor unions important for business cycle fluctuations? Lessons from Bulgaria (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:203180

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