Talk:J curve

Trade balance

This cannot be right: "A lower exchange rate initially makes the trade balance... negative... as the goods and services being exported are being purchased for less domestic currency..." The exchange rate ensures that the same domestic money is earned despite the change in the foreign price (through direct change in exchange rate). For example, in simplest terms, at an exchange rate of $2 to the £, a £100 product would be on sale (ignoring transport, marketing costs abroad etc) for $200. Devaluing the £ so that the exchange rate is now $1.50 to a £ would mean the same good is now sold for $150 in the USA, but for each good THE BRITISH FIRM STILL EARNS £100 PER GOOD WHEN THE MONEY IS EXCHANGED. The firm's revenues only rise when more people start to buy that good. More demand obviously equals more money, but this is in the long run according to the j-curve, or at least made an ineffective change by demand for more expensive imports still being demanded for the short-run. This is not clear and, unless someone can show me otherwise, the statement above is an incorrect one. 16 November 2006

You're ignoring the effect of imports on the trade balance. Yes, marginal revenues from exports remain the same during initial devaluation of the domestic currency; however, the marginal costs from imports increase and create a negative impact on the trade balance. Using your example, if we devalue the dollar to $2.5 against the pound, the same good now cost $250 instead of $200; thus, assuming the good is available domestically and of equal value, the demand for the foreign good would decrease in favor of the domestically produced good. 16 July 2007

Neoconservative??

To Discotropico and 212.202.233.19...I object to the classification of the J Curve as "neoconservative". As it appeared to be original research, I've removed the references (on J Curve justification for war, neoconservative link, etc...) for NPOV reasons. Care to elaborate on your reasoning? JGray 21:41, 6 December 2006 (UTC)

Mathematical description

Obviously a J curve is a mathematical entity first, and a statistical phenomenon second. How is a J curve described mathematically? We need sources for all phenomena that are presently referred to as "J curves". It sounds almost like a prescription for crankery. JFW | T@lk 19:22, 28 May 2007 (UTC)

Agree. I looked for any actual mathematics in the article and found only vague references to the 'J-shaped curve'. And every curve shown is quite different in its shape from every other, unsurprisingly as there is no precise definition of Or equation for a 'J-shaped curve', unlikely actual mathematically defined concepts. The curve would seem to be more at home in imprecise / opinion-based / disciplines such as social sciences, politics, economics in which many different theories can co-exist to explain observations since they're are rarely uniquely verifiable. — Preceding unsigned comment added by 86.185.46.237 (talk) 08:25, 1 March 2022 (UTC)

Medicine

We how about we move the stuff about Medicine to another page. The Economics page should be separate from the MedicineMondaymonkey1 (talk) 21:58, 16 January 2008 (UTC)

balance of payments model

"Following the depreciation or devaluation of the currency, the volume of imports and exports will remain level due in part to pre-existing contracts for imported goods that have to be honoured. However, the depreciation will cause the price of imports to rise and the price of exports to fall. Therefore, total spending on imports will subsequently increase and total spending on exports will decrease. It is this that causes the worsening of the current account."

Shouldnt it be, "Therefore, total spending on imports will subsequently increase and total revenue from exports will decrease." Instead???? Grt05 27 May 2009

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