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- W2336007924 abstract "Summary: Spain, Greece and Portugal have undertaken an “internal devaluation” strategy aimed at recovering competitiveness and correcting external deficits. It is also argued that it will trigger an export-led growth recovery. However, although wages and unit labour costs have indeed decreased as a consequence of this kind of policies, real effective exchange rates have improved much less if they are calculated using production prices or export prices. This is explained by the increase in profit margins, the low inflation rate in the monetary union as a whole, and the nominal appreciation of the euro. On the other hand, current account deficits have been corrected, and net exports are now having a positive contribution to growth. In this paper, we show that this is a result of low relative demand and not of the improvement in competitiveness and that this positive contribution is insufficient to handle the recovery of growth and employment. Key words: Internal devaluation; Competitiveness; European Periphery; Monetary Union; Wages." @default.
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- W2336007924 date "2014-01-01" @default.
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- W2336007924 title "Internal devaluation in the European periphery: the story of a failure" @default.
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