RT Report
T1 Internal devaluation in a wage-led economy. The case of Spain
A1 Álvarez, Ignacio
A1 Uxó, Jorge
A1 Febrero Paños, Eladio
AB The 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.
PB Instituto Complutense de Estudios Internacionales (ICEI)
SN 2530-0849
YR 2017
FD 2017
LK https://hdl.handle.net/20.500.14352/22899
UL https://hdl.handle.net/20.500.14352/22899
LA eng
DS Docta Complutense
RD 6 abr 2025