Marshall–Lerner condition

The Marshall–Lerner condition (after Alfred Marshall and Abba P. Lerner) is satisfied if the absolute sum of a country's export and import demand elasticities (demand responsiveness to price) is greater than one. If it is satisfied, then if a country begins with a zero trade deficit then when the country's currency depreciates (e.g., in case the US is the country in focus, it takes more dollars to buy the Japanese yen), its balance of trade will improve (e.g., the U.S. will develop a trade surplus with Japan).

Source: Wikipedia — Marshall–Lerner condition (CC BY-SA 4.0)

Marshall–Lerner condition

The Marshall–Lerner condition (after Alfred Marshall and Abba P. Lerner) is satisfied if the absolute sum of a country's export and import demand elasticities (demand responsiveness to price) is greater than one. If it is satisfied, then if a country begins with a zero trade deficit then when the country's currency depreciates (e.g., in case the US is the country in focus, it takes more dollars to buy the Japanese yen), its balance of trade will improve (e.g., the U.S. will develop a trade surplus with Japan).

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Source: Wikipedia "Marshall–Lerner condition" · CC BY-SA 4.0

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