March 11, 2024 • 1 min
A J Curve is an economic theory which states that, under certain assumptions, a country's trade deficit will initially worsen after the depreciation of its currency—mainly because in the near term higher prices on imports will have a greater impact on total nominal imports than the reduced volume of imports.
This results in a characteristic letter J shape when the nominal trade balance is charted as a line graph.
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This results in a characteristic letter J shape when the nominal trade balance is charted as a line graph.
Become a supporter of this podcast: https://www.spreaker.com/podcast/investment-terms--4432332/support.
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