The Marshall-Lerner condition / J curve (HL only)

IB Economics: The Marshall-Lerner condition / J curve (HL only)

This lesson looks at why a competitive devaluation may not solve a long term current account deficit. Despite this argument there are a number of governments around the world who implement a cheap currency policy as a way of making their domestic goods and services more competitive in overseas markets. This lesson also compares the relationship between PED and the current account. Why might a competitive devaluation...

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