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Collective Wage Bargaining and the Role of Institutional Stability: A Cross-National Comparison of Macroeconomic Performance

Brandl, B.; Ibsen, C.L.

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Authors

C.L. Ibsen



Abstract

Since the advent of the economic crisis, interest in the efficacy of collective wage bargaining institutions has increased as the labour market was required to bear the burden of economic adjustment and became an important policy-field for institutional reform in many countries. In this article, the role of institutional stability, trust and certainty for the efficacy of collective bargaining systems is investigated and their effects on macroeconomic outcomes—inflation and unemployment—are analysed. We argue that stability of the institutional framework of collective bargaining is of major importance for its efficacy as it reduces uncertainty and provides the necessary basis for trust among bargaining actors. Thus, we hypothesise that institutional change and instability are associated with significant transaction costs and have, at least temporarily, negative effects on economic outcomes. The hypotheses are confirmed by an empirical analysis, which uses data of 34 industrialised countries from 1965 to 2014.

Citation

Brandl, B., & Ibsen, C. (2019). Collective Wage Bargaining and the Role of Institutional Stability: A Cross-National Comparison of Macroeconomic Performance. Cambridge Journal of Economics, 43(3), 677-694. https://doi.org/10.1093/cje/bey041

Journal Article Type Article
Acceptance Date Sep 7, 2018
Online Publication Date Oct 10, 2018
Publication Date May 30, 2019
Deposit Date Oct 5, 2018
Publicly Available Date Mar 29, 2024
Journal Cambridge Journal of Economics
Print ISSN 0309-166X
Electronic ISSN 1464-3545
Publisher Oxford University Press
Peer Reviewed Peer Reviewed
Volume 43
Issue 3
Pages 677-694
DOI https://doi.org/10.1093/cje/bey041
Public URL https://durham-repository.worktribe.com/output/1346517

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Copyright Statement
This is a pre-copyedited, author-produced PDF of an article accepted for publication in Cambridge journal of economics following peer review. The version of record Brandl, B. & Ibsen, C. L. (2019). Collective Wage Bargaining and the Role of Institutional Stability: A Cross-National Comparison of Macroeconomic Performance. Cambridge Journal of Economics 43(3): 677-694 is available online at: https://doi.org/10.1093/cje/bey041.





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