However, it strengthened labor institutions by supporting the bargaining power of unions and innovating in cash transfer programs.
To limit the size of this paper, we leave aside the issues associated with inequality and the role of labor institutions in that context.
The six proposed episodes can be classified into three types: (1) periods of serious macroeconomic crisis (episodes 3 and 5), (2) periods of liberalization with weak labor institutions (episodes 1 and 4), and (3) episodes of low import penetration and stronger labor institutions (episodes 2 and 6).
That was not the case: the modernization of Argentina's economy took place in just a few years in a scenario of weak labor institutions, and in the midst of a process of labor deregulation.
Following this literature, it is useful to divide these determinants in to six groups: (a) demographic characteristics, (b) the state of the business cycle, (c) labor institutions, (d) competition/regulation conditions, (e) political institutions, and (f) public finances and external imbalances.
The main characteristics of this episode include the adjustment of economic agents to the new relative prices implied by the devaluation (and later, depreciation, given that a dirty floating was adopted), stronger labor institutions and a more extensive safety net.
But, with the exception of Ioannides and Pissarides (2015), that also consider the role of market structure and labor institutions, this literature emphasizes other aspects of the causes and remedies of the deep recession.6.6
Table 3 in turn characterizes these episodes in terms of five elements: (1) macroeconomic performance, (2) openness to international trade, (2) technological change and physical capital accumulation, (3) unions and labor institutions, and (5) social protection.
The dictatorial government suspended collective bargaining, targeted repression at lower level union leaders, weakened unions, undermined labor institutions, cut down social policies, and initiated a process of trade liberalization.
