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

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

On the meaning of the deflation of value added

The aim of this paper is to show that the concept of deflated value added rests on a misleading notion of capital and (or) a particular theory of value and distribution. From a Sraffian theoretical standpoint, it will be shown by means of a counterexample that deflated value added is rather problematic, as prices are determined simultaneously within distribution for a currently available technology. As technical change takes place, the distributional possibilities of the system change and, therefore, so do prices. Hence, if old prices are used to measure new technology, defined by requeriments of intermediate commodities, the resulting value added (as it is a monetary variable) will not equal the value of the net product (which is the physical symmetric of the former variable), in the general case. Moreover, if the equality holds, profit rates will adopt striking results

Estimación do impacto da COVID-19 na economía española con táboas input-output

In this paper we present a forecast of the impact of measures to stem Covid-19 on the Spanish economy at a highly disaggregate level, using input-output techniques. Our estimations cover the period 2020-2021, and we consider two scenarios depending on the possibility of a second wave of massive infections in the autumn of 2020. In 2020, the lockdown of the population and the shutdown of a large part of the production system for several weeks are a supply-side shock that will be followed by a demand-side shock whose impact is expected to be even larger. In 2021 there will be some recovery, although we believe that it will not be sufficient for offsetting the initial negative shock. al negative shock.En este artículo presentamos una previsión del impacto de las medidas para frenar el COVID-19 en la economía española en un alto nivel de desagregación sectorial, utilizando la metodología input-output. Nuestras estimaciones se refieren al período 2020-2021, en el que consideramos dos escenarios basados ​​en la posibilidad de una segunda ola de infecciones masivas en el otoño de 2020. Medidas de confinamiento poblacional y paralización de gran parte del sistema productivo durante varias semanasde 2020 han supuesto un choque de oferta al que se sumará un choque de demanda cuyo impacto se espera sea aún mayor. En 2021 habrá cierta recuperación, aunque creemos que no será lo suficientemente intensa como para contrarrestar la choque negativo inicial.Neste artigo presentamos unha previsión do impacto das medidas para frear a Covid-19 na economía española a un alto nivel de desagregación sectorial, utilizando metodoloxía input-output. As nosas estimacións refírense ao período 2020-2021, no que consideramos dous escenarios en función da posibilidade dunha segunda vaga de infeccións masivas no outono de 2020. As medidas de confinamento da poboación e a paralización de gran parte do sistema produtivo durante varias semanas de 2020 supuxeron un shock de oferta ao que se unirá un shock de demanda cuxo impacto se espera que sexa aínda maior. En 2021 haberá certa recuperación, aínda que consideramos que non será o suficientemente intensa como para compensar o shock negativo inicial

Measuring Productivity from Vertically Integrated Sectors

There are many ways to measure productivity. The choice will depend on the suitability of each index to the main purpose the researcher has in mind. Whenever we are interested in 'competitiveness', the proper measure will be the inverse of the total labour embodied in one unit of final product; or, what amounts to the same, the labour employed in the vertically integrated sector corresponding to each final good. A weighted mean of these yields an index of aggregate productivity suitable for measuring social welfare. Another index of aggregate productivity (this one related to the profit rate and potential growth) coincides with the inverse of the maximum eigenvalue of the 'socio-technical matrix'. These indices are computed for the Spanish economy and compared with more conventional ones.Productivity, Vertically Integrated Sectors, Labour Values, Prices Of Production,

Estimating the impact of COVID-19 on the Spanish economy with input-output analysis

n this paper we present a forecast of the impact of measures to stem COVID-19 on the Spanish economy at a highly disaggregate level, using input-output techniques. Our estimations cover the period 2020-2021, and we consider two scenarios depending on the possibility of a second wave of massive infections in the autumn of 2020. In 2020, the lockdown of the population and the shutdown of a large part of the production system for several weeks are a supply-side shock that will be followed by a demand-side shock whose impact is expected to be even larger. In 2021 there will be some recovery, although we believe that it will not be sufficient for offsetting the initial negative shock.este artigo presentamos unha previsión do impacto das medidas para frear a COVID-19 na economía española a un alto nivel de desagregación sectorial, utilizando metodoloxía input-output. As nosas estimacións refírense ao período 2020-2021, no que consideramos dous escenarios en función da posibilidade dunha segunda vaga de infeccións masivas no outono de 2020. As medidas de confinamento da poboación e a paralización de gran parte do sistema produtivo durante varias semanas de 2020 supuxeron un shock de oferta ao que se unirá un shock de demanda cuxo impacto se espera que sexa aínda maior. En 2021 haberá certa recuperación, aínda que consideramos que non será o suficientemente intensa como para compensar o shock negativo inicial

Endeudamiento familiar y crecimiento económico: un patrón de crecimiento insostenible.

The Spanish economy experienced a period of substantial prosperity from 1997 to mid 2007, driven by household spending on residential investment and durable consumer goods, funded out of bank debt. However, this pattern of growth was unsustainable: any given rate of growth of output required growing household indebtedness, because of rising house prices which, in turn, led to heavier debt burden service thus subtracting funds which would otherwise have gone to sustaining aggregate demand at a higher level. When household indebtedness stops growing, because its currently rocketing level, plus the rise of the interest rates, the high house prices, the saturation of the dwelling market, and the tightening of credit standards required by banks, GDP and employment shrink because of a lack of effective demand: forced saving to settle debt service is not offset by new household borrowing.family leverage, residential investment, economic growth.

La influencia del tipo de interés en los precios. Una reinterpretación heterodoxa de Wicksell

The aim of this work is to describe the innovation system in Navarra, that is, its composition, environment, structure, from a dynamic point of view, his evolution over the last years; and synchronous, the results are compared with those of Bask Country, Japan, USA and other reference countries. Most of the used indicators (specifically those related to the global innovation, scientific system and the R&D of firms) rank Navarra in the top positions out of the autonomous-Spanish communities, achieving or even beating, in some indicators, the European average. Nevertheless, even though a positive evolution was found out, Navarra will have to face significant challenges in the near future: improving the firms’ innovation situation and developing properly the technologic centres recently created.Wicksell, interest rate, growth rate, financial asset price

Reforma laboral, devaluación salarial y empleo: una perspectiva macroeconómica

El objetivo de este artículo es analizar la reforma laboral aprobada en 2012 desde una perspectiva macroeconómica, en el sentido de que nos interesa comprender su inserción en el contexto global de la estrategia de política económica que han aplicado las autoridades, y su impacto en el desempleo registrado por la economía española. Se ocupa principalmente del efecto que la reforma laboral ha tenido en el comportamiento agregado de los salarios, y su influencia, junto a otros elementos con los que se combina, como la austeridad fiscal, en la evolución del desempleo. Nuestra conclusión es que la caída de los salarios impulsada por la reforma laboral ha sido perjudicial  para el empleo porque el efecto restrictivo sobre la demanda interna –que se suma al que se deriva de la austeridad fiscal- ha sido mayor que el impulso sobre la demanda externa

La sostenibilidad del sistema español de pensiones: Una aproximación alternativa

The likely raise in the expenditure on pensions is increasingly perceived as an obstacle to economic growth. In the first part of this paper, after describing the keys to the sustainability of pension systems in the face of the challenges posed by population aging, we analyse whether private funding systems actually offer a more appropriate solution to the demographic issue than pay-as-you-go systems. Subsequently, as the main objective of this paper, our analysis focuses on the positive consequences of pension expenditure on the economy. The results of our investigation show the employment and income obtained from the production associated to the pensioners’ consumption.El posible aumento del gasto en pensiones se percibe cada vez más como un obstáculo que limita el crecimiento económico. En la primera parte del artículo, tras describir las claves de la sostenibilidad del sistema de pensiones ante los retos impuestos por el envejecimiento de la población, analizamos si los fondos privados ofrecen realmente una solución más adecuada que los modelos de reparto al problema demográfico. Posteriormente, como principal objetivo de la presente investigación, nuestro análisis se centra en los efectos positivos que el gasto dedicado a las pensiones produce sobre los sistemas económicos. Los resultados del estudio muestran los valores de empleo y renta que se genera en la producción asociada al consumo de los pensionistas

The Monetization of Profits in a Monetary Circuit Framework

This paper offers an explanation of the realization of profits in money. Following Edward Nell's lead, we place Marx's spheres of production and circulation at the centre of the analysis. Production is represented a la Sraffa-von Neumann while circulation is analysed following the basic insights of the Franco-Italian theory of the monetary circuit. Once production has taken place, money is created by banks ex nihilo and then circulates through certain channels allowing the reproduction of the system and monetizing profits plus the payment of interest on long-term debts within one single circuit. The novelty of our approach lies in the treatment of the financing of investment in fixed capacity.