From 43e319b06b911ced84f8b8cc47d0fc895b25273d Mon Sep 17 00:00:00 2001 From: bishmaybarik Date: Fri, 8 Aug 2025 13:30:19 +0530 Subject: [PATCH] Add additional information on why France has a slower recovery after negative shocks --- lectures/business_cycle.md | 3 +-- 1 file changed, 1 insertion(+), 2 deletions(-) diff --git a/lectures/business_cycle.md b/lectures/business_cycle.md index 5e7174bb4..4c67c117f 100644 --- a/lectures/business_cycle.md +++ b/lectures/business_cycle.md @@ -591,8 +591,7 @@ plot_comparison(unempl_rate, countries, plt.show() ``` -We see that France, with its strong labor unions, typically experiences -relatively slow labor market recoveries after negative shocks. +We see that France, with its strong labor unions, typically experiences slower labor market recoveries after negative shocks because union influence often leads to stringent employment protection laws, high firing costs, and rigid wage structures. While these measures protect existing workers, they reduce firms’ flexibility to adjust labor costs and hiring in response to changing economic conditions, causing lower labour market adaptability during recoveries. We also notice that Japan has a history of very low and stable unemployment rates.