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Economic Growth: The Case of Irreversibility of Investment with Bargaining Power of Workers

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  • Isabelle Terraz

Abstract

In this paper, we develop a model of endogenous growth with search frictions in the labor market. We show that the growth rate of the economy may be durably altered in a case of investment irreversibility and bargaining power of workers. Labor market conditions mitigate this rent-seeking effect of workers.

Suggested Citation

  • Isabelle Terraz, 2016. "Economic Growth: The Case of Irreversibility of Investment with Bargaining Power of Workers," International Economic Journal, Taylor & Francis Journals, vol. 30(1), pages 75-86, March.
    • Handle: RePEc:taf:intecj:v:30:y:2016:i:1:p:75-86
    DOI: 10.1080/10168737.2015.1136665
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    References listed on IDEAS

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    1. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, December.
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    6. Christopher A. Pissarides & Marie Ange Veganzones-Varoudakis, 2006. "Labor Markets and Economic Growth in the MENA Region," Contributions to Economic Analysis, in: Explaining Growth in the Middle East, pages 137-157, Emerald Group Publishing Limited.
    7. Alison L. Booth (ed.), 2002. "The Economics of Labor Unions," Books, Edward Elgar Publishing, volume 0, number 2201.
    8. Alison Booth, 2012. "The Economic Behavior of Trade Unions," CEPR Discussion Papers 670, Centre for Economic Policy Research, Research School of Economics, Australian National University.
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    Cited by:

    1. Grodzicki, Maciej J. & Możdżeń, Michał, 2021. "Central and Eastern European economies in a Goldilocks age: A model of labor market institutional choice," Economic Modelling, Elsevier, vol. 104(C).

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