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Are Labor Unions Important for Business Cycle Fluctuations: Lessons from Bulgaria (1999-2016)

Author

Listed:
  • Aleksandar Vasilev

    (Lincoln International Business School, UK)

Abstract

In this paper we investigate the quantitative importance of collective agreements in explaining uctuations in Bulgarian labor markets. Following Maffezzoli (2001), we introduce a monopoly union in 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 (1999-2016), and compare and contrast it to a model with indivisible labor and no unions as in Rogerson and Wright (1988). We find that the sequential bargaining between unions and firms produces an important internal propagation mechanism, which fits data much better that the alternative framework with indivisible labor.

Suggested Citation

  • Aleksandar Vasilev, 2019. "Are Labor Unions Important for Business Cycle Fluctuations: Lessons from Bulgaria (1999-2016)," Bulgarian Economic Papers bep-2019-02, Faculty of Economics and Business Administration, Sofia University St Kliment Ohridski - Bulgaria // Center for Economic Theories and Policies at Sofia University St Kliment Ohridski, revised Jan 2019.
    • Handle: RePEc:sko:wpaper:bep-2019-02
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    File URL: https://www.uni-sofia.bg/index.php/eng/content/download/207556/1406460/file/BEP-2019-02.pdf
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    Cited by:

    1. Nazmus Sadat Khan, 2020. "Propagation of economic shocks from Russia and Western European countries to CEE-Baltic countries," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 10(3), pages 489-512, September.

    More about this item

    Keywords

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    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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