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Internal devaluation in a wage-led economy. The case of Spain

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dc.contributor.authorÁlvarez, Ignacio
dc.contributor.authorUxó, Jorge
dc.contributor.authorFebrero, Eladio
dc.date.accessioned2023-06-18T05:38:23Z
dc.date.available2023-06-18T05:38:23Z
dc.date.issued2017
dc.description.abstractThe aim of this paper is to use the theoretical distinction between wage-led and profit-led economies to consider the impact of internal devaluation policy on GDP growth for the case of Spain. We assess to what extent wage devaluation in Spain has proven useful vis-à-vis triggering an exportled strategy, boosting aggregate demand and overcoming the crisis. For said purpose, we estimate a Bhaduri-Marglin model drawing on quarterly data from Eurostat, and we expand the traditional model to take into account the effect of private debt on consumption and investment. Our main conclusion is that the Spanish economy can be characterized as a wage-led economy, and that therefore a wage share decrease proves counterproductive to growth. According to our calculations, internal devaluation policy detracted an average of 0.3 percentage points of annual economic growth during the period 2010-2016.
dc.description.facultyInstituto Complutense de Estudios Internacionales
dc.description.refereedTRUE
dc.description.statuspub
dc.eprint.idhttps://eprints.ucm.es/id/eprint/42692
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dc.identifier.issn2530-0849
dc.identifier.relatedurlhttps://www.ucm.es/icei/working-papers
dc.identifier.urihttps://hdl.handle.net/20.500.14352/22899
dc.issue.number05
dc.language.isoeng
dc.page.total32
dc.publication.placePozuelo de Alarcón. España
dc.publisherInstituto Complutense de Estudios Internacionales (ICEI)
dc.relation.ispartofseriesWorking Papers
dc.rightsAtribución-NoComercial 3.0 España
dc.rights.accessRightsopen access
dc.rights.urihttps://creativecommons.org/licenses/by-nc/3.0/es/
dc.subject.jelE24
dc.subject.jelE25
dc.subject.jelE64
dc.subject.keywordDistribution
dc.subject.keywordDemand
dc.subject.keywordWage share
dc.subject.keywordBhaduri-Marglin model
dc.subject.keywordDebt
dc.subject.keywordDistribución
dc.subject.keywordDemanda
dc.subject.keywordParticipación salarial
dc.subject.keywordModelo de Bhaduri-Marglin
dc.subject.keywordDeuda
dc.subject.ucmCrisis económicas
dc.subject.ucmTrabajo
dc.subject.unesco5307.06 Fluctuaciones Económicas
dc.titleInternal devaluation in a wage-led economy. The case of Spain
dc.typetechnical report
dc.volume.number2017
dspace.entity.typePublication
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