The Standard Model of Trade and the Marshall – Lerner Condition

Słowa kluczowe

standard trade model Marshall-Lerner condition revaluation elasticities balance of trade

Streszczenie

There are similarities between standard trade model and Marshall-Lerner condition. However, in order to see whether the condition can work both ways (with decrease and increase of the currency exchange rate), and the properties of this model could be thoroughly utilized, the revaluation case is being considered. The J-curve effect is also being examined. Looking at further research ideas, the Marshall–Lerner condition could be a complimentary tool in explaining the standard model.