beef bourguignon recipe

3 tablespoons olive oil - 2 1/2 pounds beef chuck, cut into 1-inch cubes - Salt and black pepper to taste - 4 slices bacon, diced - 1 large onion, chopped - 2 carrots, peeled and sliced - 2 cloves garlic, minced - 2 tablespoons tomato paste - 2 tablespoons all-purpose flour - 2 cups red wine (Burgundy is traditional) - 2 cups beef broth - 1 bay leaf - 1 teaspoon dried thyme - 1/2 pound pearl onions, peeled - 1/2 pound mushrooms, sliced - Fresh parsley, chopped (for garnish)