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Internal devaluation is an economic and social policy option whose aim is to restore the international competitiveness of some country mainly by reducing its labour costs – either wages or the indirect costs of employers. Sometimes internal devaluation is considered as alternative to 'standard' external devaluation, although social implications and speed of economic recovery can significantly differ between the two options. Internal devaluation was first considered during the Sweden economic crisis during the 1990s and Finland's accession to the European Union in 1995. Internal devaluation gained popularity during the economic recession of 2008–2010 when several countries pursued such policies with aim to restore competitiveness and to balance national budgets. While internal devaluation is discussed by several publications in the magazines The Economist and The Wall Street Journal, generally there is lack of peer-reviewed research. That is why the widely discussed eventual success of internal devaluation is considered as urban legend or in worst cases – as political propaganda by neoliberal or Keynesian economists. Latvia is often named as successful case of internal devaluation by popular media, although its poor performance in the international development indices (e.g. Global competitiveness indices, European Union Innovation Scoreboard,〔http://www.proinno-europe.eu/inno-metrics/page/innovation-union-scoreboard-2010〕 the miserable rating levels had not changed in the following year as well 〔http://www.proinno-europe.eu/inno-metrics/page/innovation-union-scoreboard-2011〕) as well as severe emigration proves the negative impact of internal devaluation on the development of the human resources and the potential GDP (whose performance can be measured by the notable inflation rate). ==Academic research== Although internal devaluation as a policy has been put in work already for some years in the several countries, the academic research has started to appear only from the beginning of 2012 and even then it has not gone further beyond qualitative observations (e.g. ScienceDirect database list more than 3 times more articles for such emerging discipline as geo-engineering (human control of global climate) than for internal devaluation). merely mentions some well known news items about the internal devaluation. recognizes that "the most efficient way to reduce the cost of labour is to run high levels of unemployment". But apparently, that can be acceptable only in the countries where the gray economy is tolerated. In fact, there is research about the labour market policies that has been implemented during the internal devaluation and the researcher concluded "I will argue that the seemingly flexible reaction of the ... labour market to the crisis is to a large extent due to weak law enforcement". acknowledges (without quantitative estimations) that the policy of internal devaluation is "painful and slow". Currently is the most exhaustive manuscript about internal devaluation. It acknowledges that the internal devaluation can be politically costly and that it requires that the "labour market institutions need to allow for more flexibility, and more product market competition is required", but it misses the point that the development of the human capital cannot occur without the necessary investments. It also mentions the limitations of what can be achieved by the internal devaluation - internal devaluation can result in the "interesting trap of no-downward wage adjustment as the flexible part of earnings vanishes". The article also proposes idea about internal revaluation. Paul de Grauwe argues that the competitiveness of Portugal, Ireland, Italy, Greece and Spain deteriorated during the period from 1999 to 2008/9, and that since 2008/9 dramatic turnarounds of the competitive positions have occurred in Ireland, Spain and Greece. de Grauwe estimates Ireland to have completed an internal devaluation amounting to 23.5%, Greece 11.4%, Spain 8.9%, Portugal 3.2% and Italy 0.6%.〔(In search of symmetry in the eurozone ), Paul de Grauwe, 2 May 2012〕 Pisani-Ferry argues that internal devaluation would optimally entail a simultaneous cut of, say, 10% to all wages and prices in a country. While this is difficult to achieve in practice, he says internal devaluation is not impossible to implement in a meaningful way. Pisani-Ferry says Latvia was rather successful in performing its internal devaluation following the crisis of 2008–09. While the process was painful in terms of unemployment and wage cuts, exports did pick up, the external deficit was eliminated and Latvia's economy returned to growth.〔Jean Pisani-Ferry: "The Euro Crisis and its Aftermath", loc 2089〕 Another alternative (mentioned in old textbooks) is to cut taxes, hence making labour cost cheaper 〔http://www.economicshelp.org/blog/2495/economics/internal-devaluation-definition/〕 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「Internal devaluation」の詳細全文を読む スポンサード リンク
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