J-curve

J-curve

Theory that says a country's trade deficit will initially worsen after its currency depreciates because higher prices on foreign imports will more than offset the reduced volume of imports in the short run.

J Curve

1. In charting, the theoretical trend of a country's trade balance after the devaluation of its currency. After a devaluation in currency, there is often a slight increase in the trade deficit, but the long-term effect is a trade surplus due to the fact that a good sold in a devalued currency makes a good less expensive for international buyers. This is represented graphically as a curve that briefly dips below the x-axis, representing time, before turning upwards, resembling the letter J. On this graph, the y-axis represents the trade balance.

2. In equity funds, the theoretical trend of the internal rate of return over several years. Most funds operate at a loss at their beginning, due in part to their start-up costs. Later, if the fund is successful, the internal rate of return rises significantly. This is represented graphically as a curve that briefly dips below the x-axis, representing time, before turning upwards, resembling the letter J. On this graph, the y-axis represents the internal rate of return.
References in periodicals archive ?
There was a J-curve relation between diastolic blood pressure and outcomes; this finding was partially explained by age and other covariates and by a higher effect of systolic hypertension among individuals in the lowest diastolic blood pressure quartile.
As expected, the study showed that lowering blood pressure decreased the risk of death.But the risk increased again unexpectedly as the diastolic blood pressure (the second number, which is the pressure as the heart relaxes) fell below 85 millimetres' of mercury, a pattern the study authors described as a "J-curve.
This is based on fairly robust data suggesting a tilted J-curve pattern in hypertension.
While talking to Profit about the decline in the trade deficit, Senior Advisor Tundra Fonder A.A.H Soomro explained that the J-curve effect theoretically takes 2-3 quarters before we're in the upper gradient.
Ian Bremmer's smart 2006 book, "The J-Curve," argued that some countries are stable because they are closed -- North Korea, Belarus, for instance -- while others are stable because they are open, like the U.S.
Ian Bremmers smart 2006 book, "The J-Curve," argued that some countries are stable because they are closed North Korea, Belarus, for instance while others are stable because they are open, like the United States and Japan.
The J-curve studies related to India have mostly either used aggregate trade flows of India with the rest of the world or between India and its trading partners.
Simply put, advisors are in a bit of an investment J-curve right now, and it's important to realize that while defense is important in sports, it's time to play offense again to help ensure the benefits of these investments are realized.
He pointed out that there is a J-curve which should be clinically disturbing.
This supports the idea of a J-curve in optimal blood pressure, since very low diastolic blood pressure leads to poor myocardial perfusion, causing problems.
In this condition, the ML condition would be manifested as J-curve.
He added that it takes a considerable amount of time for the weakening of a currency to affect exports, citing the J-curve effect.