Manon's Econ Blog

Hope might be in sight for the UK: The Marshall-Lerner Condition and the J-Curve

Posted on: December 6, 2010

The UK’s currency depreciated, but since the exports and imports are demand inelastic, a change in price will not lead to a great increase in quantity; thus imports are more expensive but the quantity did not change, and exports are cheap but not more people demand it. Therefore, the Marshal Lerner condition was not filled out.

Since the condition was not filled out, the UK did not get better but the currency devaluated, thus it became even worse, so the first part of the J-curve. Nevertheless, as the world noticed that UK exports are cheap they may demand more, and the UK suppliers may be able to be more efficient thus they may meet the need of the people of the country, so the UK economy will get better. The J-curve will then be complete.

Article

Advertisements

1 Response to "Hope might be in sight for the UK: The Marshall-Lerner Condition and the J-Curve"

Remember take any opportunity to include a diagram.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: