Marshall Lerner Diagram. Introduction to the lerner diagram alan v. Identification of relevant factors with no explanation 1 mark only please note that this question concerns the factors that determine the impact of devaluation upon a countrys current account.
Alfred marshall 1842 1924 abba lerner 1903 82. The j curve the marshall lerner condition and whether iceland has the capacity to expand exports will be developed in high scoring answers. Mix up the diagrams and text for students to then match them back together.
The marshall lerner condition after alfred marshall and abba p.
This will be the sum of the effects we identified above on imports and exports. One of it aims to achieve an internal balance and the second to achieve an external balance. The marshall lerner condition is set to hold when the sum of price elasticity of demand for imports and exports is greater than 1. When working with depreciation always remember we assume the marshall lerner condition holds.