Adjustment lags such as recognition lags, production lags, delivery lags, and so on can also contribute to the J-curve effect
The first one investigated J-curve effect
He added that it takes a considerable amount of time for the weakening of a currency to affect exports, citing the J-curve effect
Over time, however, it was expected that Japan's trade balance would improve in line with the J-curve effect
as the weaker yen translates into lower and hence more competitive export prices of Japanese products, which in turn would lead to a rise in the volume of exports.
Although many studies on the J-curve effect
have been published, few of them focus on Central and Eastern European (CEE) countries and Czechia in particular.
According to Preqin, this appeared to be a response to investors' search for opportunities that offered lower fees, improved transparency and mitigation of the J-curve effect
, in which returns first drop below initial value and later show profits exceeding the initial level.
Moreover, by estimating the corresponding ECM and IRF, they demonstrated the existence of a J-curve effect
. Their estimates suggest that trade balance tends to deteriorate in the first five quarters, but subsequently improves and reaches a new equilibrium value over approximately thirteen quarters.
That is the reason why our exports are also not responding to the fluctuations in exchange rate and giving us the benefits of J-curve effect
Now, amidst the debate about economic reforms in Europe, another kind of J-curve effect
is upon us.
Over the sample period 1981:1-1993:12, we find, while there is a slight dampening of the response of the trade account and its components over the NAFTA period relative to the pre-NAFTA period, a J-curve effect
does not occur over both periods.
The J-curve effect
of food aid on commercial food imports is clear in this graphic.
One is the so-called J-curve effect
, according to which a devaluation tends to cause exports to dip first and rise later.