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oai:docta.ucm.es:20.500.14352/974672025-03-18T14:13:45Zcom_20.500.14352_14col_20.500.14352_15

00925njm 22002777a 4500 dc Villanueva Cortés, Paloma author Cárdenas Del Rey, Luis author 2021 This article analyses from a Keynesian approach the effect of wage devaluation on the Spanish labour market during the Great Recession post-2008. It challenges the proflexibility literature, which attributes to labour relations reforms the prevention of larger job destruction in the recession and a larger reduction in unemployment during the subsequent expansion. Instead, we examine the role of wage devaluation in the operation of Okun’s law and gross domestic product, using an extended version of the Bhaduri–Marglin model. We find that wage devaluation has not significantly modified Okun’s law and that through its impact on income distribution, the unemployment rate rose by 1.9 percentage points. We therefore provide evidence for the negative effect of wage devaluation on gross domestic product and the positive effect on the unemployment rate. Villanueva, P., & Cárdenas, L. (2021). Unemployment in Spain: The failure of wage devaluation. The Economic and Labour Relations Review, 32(4), 552-574. https://doi.org/10.1177/10353046211023807 1035-3046 10.1177/10353046211023807 https://hdl.handle.net/20.500.14352/97467 https://doi.org/10.1177/10353046211023807 Unemployment in Spain: The failure of wage devaluation