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Alejandro González

@agonc.bsky.social
20 followers 250 following 11 posts

Empirical Macroeconomist at the BCRP. Views are my own. sites.google.com/fen.uchile.cl/alej…

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Alejandro González @agonc.bsky.social · 07/10/2026
In conclusion: Bargaining shocks matter for output fluctuations; not so much for the distribution of income between capital and labor. The emphasis on models where they contract output is not at odds with empirical evidence. Retweet if you find it interesting!🧵[8/8]
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Alejandro González @agonc.bsky.social · 07/10/2026
Key result 3: Bargaining shocks do not explain the recent decline of the labor share. The effect goes in the other direction! My interpretation: bargaining shocks raise the labor share in the short-run, but contract output and raise unemployment, depressing the labor share in the medium-run. 🧵[7/8]
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Alejandro González @agonc.bsky.social · 07/10/2026
Key result 2: Bargaining shocks account for a third of output fluctuations at all horizons. Conflict over income distribution is important to understand the business cycle! This is much lower than what is implied by some medium scale DSGE's, but much larger than many economists priors. 🧵[6/8]
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Alejandro González @agonc.bsky.social · 07/10/2026
Key Result 1: Bargaining shocks contract output, and very much so! A typical shock contracts output by x on impact and by 0.8% ten years after the shock. This as evidence against benign demand effects; coherent with other studies that find smaller gaps in MPCs than one would expect. 🧵[5/8]
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Alejandro González @agonc.bsky.social · 07/10/2026
I then embed these events into a SVAR that contains output, unemployment and the labor share, and use additional sign restrictions to help me control for demand and supply shocks. 🧵[4/8]
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Alejandro González @agonc.bsky.social · 07/10/2026
To identify bargaining shocks, I use three narrative events where presidents changed their attitude towards capital-labor negotiations. For example, Kennedy passed an Executive Order in 1962 that allowed bargaining for public sector workers. This is a positive bargaining shock! 🧵[3/8]
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Alejandro González @agonc.bsky.social · 07/10/2026
My motivation is simple: standard theory suggests bargaining shocks depress output and raise unemployment by increasing the wedge between labor demand and supply. Post-Keynesian models suggest output can expand due to benign demand effects: wage earners have higher MPCs than employers. 🧵[2/8]
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Alejandro González @agonc.bsky.social · 07/10/2026
Have you ever wondered what are the aggregate effects of increases in the bargaining power of labor? 📝My JMP 'Bargaining Shocks and the Macroeconomy: A Narrative Approach" tackles this question! 🧵[1/8] www.dropbox.com/scl/fi/00bal... #EconSky #Macroeconomics #LaborEcon
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Alejandro González @agonc.bsky.social · 07/10/2026
Any one that has some of our heterodox colleagues and/or is dear to your heart?
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Alejandro González @agonc.bsky.social · 07/10/2026
After noticing EconTwitter is basically dead, decided to switch! Welcome any reccomendations on how to use the platform, connect with other colleagues, and best way to promote research over here! #EconSky #Macroeconomics #LaborEcon
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Alejandro González @agonc.bsky.social · 07/10/2026
Not a Kaleckian head, but will enjoy reading this. Congrats to you, Ayoza and Karsten for having this published!
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