Many international economic institutions share the idea that collective bargaining should take place at the level of individual companies. For example, the OECD, as far back as its 1994 Jobs Strategy, pushed for more firm level bargaining by insisting that the instrument of administrative extension of collective agreements to all firms within a given sector […]

Weak wages produce a weak recovery Trade unions tend to see wages not as a factor of competitiveness but as an engine that drives demand, growth and jobs. The Economic Outlook published this week by the OECD supports this view as it explains the lacklustre economic that is going on via the stagnation of wage […]

One of the key findings from the 2016 Employment Outlook just released by the OECD is that easier firing does not create jobs. Moreover, the OECD also finds that loosening job protection in the middle of an economic downturn results in immediate and substantial job losses. However, instead of cautioning policy makers against the danger […]

Something peculiar is happening. Up until recently, many central bankers were looking at robust collective bargaining and wage formation systems as a possible source for inflationary wage developments. Indeed, central banks, and the ECB in particular, have on numerous occasions called for more flexible and decentralised (read: weakened) wage bargaining systems so as to remove […]

The ‘non-paper’ which Wolfgang Schäuble presented to his fellow finance ministers at a recent ECOFIN council in Luxemburg (leaked by the Handelsblatt newspaper) represents something of a paradox. One of its main ideas is that the euro area lacks a procedure that could declare member states bankrupt when having lost access to financial markets. This […]

Mainstream economists excel in scaremongering about the dismal effects any policy that tries to correct market forces may have on economic performance. By arguing that such a policy will destroy jobs, things are even turned upside down. Because of the presumed job losses, social policy suddenly becomes anything but social while liberal economic policy is […]

With the showdown between the “institutions” and Greece catching the headlines of policy discussions across Europe, the publication of the report on completing Economic and Monetary Union (EMU) has almost been lost from sight. The report, signed this time by five presidents including the President of the European Parliament, raises several interesting issues ranging from […]

New research by IMF staff has found there is no evidence that reforms that deregulate labour markets have any positive impact on increasing the economy’s growth potential. As labour market deregulation has been a key ingredient in the IMF and troika’s financial bail-out programmes in several European member states, this raises serious questions about the […]