Re: JNU 2013 SSS DISCUSSION

Posted by kangkan on Mar 07, 2014; 4:10pm
URL: http://discussion-forum.276.s1.nabble.com/JNU-2013-SSS-DISCUSSION-tp7584716p7585116.html

Hi Anish..there are two competing effects..the volume effect(increase in exports due to deprecitation) and value effect(increase in value of imports due to depreciation).Hence,the impact on trade deficit can go either way...
Now ,under most conditions(Marshall lerner conditions) ,the trade deficit will improve.

Check out chapter 16 on International economics(krugman)

:)