Can give you a new idea-J curve.

The meaning of (1)J-curve effect: When a country's currency depreciates, the initial trade balance will further deteriorate, rather than improve within a period of time, and the deteriorated trade balance will be controlled and improved, and finally the trade balance will be improved. This process describes a similar J-curve, so delaying depreciation to improve the trade balance is called J-curve effect.

(2) The impact of the depreciation of local currency on the time lag of balance of payments, because export growth requires investment to increase production, which is a time lag and import inertia. Even if it takes some time to find an alternative imported goods and substitutes at the decision-making level, it also takes some time to produce, so the role of currency depreciation is difficult to be reflected immediately.

(3) Western economists believe that the impact of delayed currency depreciation on trade balance can be divided into three stages: monetary contract stage, transmission stage and quantity adjustment stage.

1) currency contract, the price and quantity of import and export commodities will not change. Due to the devaluation of the currency, the balance of foreign currency trade depends on the import and export contract of the denominated currency. The depreciation of import contracts denominated in foreign currency and export contracts denominated in local currency will worsen the trade balance. 2) In the transmission stage, for various reasons, the prices of import and export commodities began to change, but there was no big change, and the balance of payments continued to deteriorate. 3) In the stage of quantity adjustment, both price and quantity changes are far greater than those of price and quantity, and the balance of payments situation begins to improve, eventually forming a surplus.

(4)J-curve effect, because the elasticity of import and export demand is less than 1 in the short term and the trade balance depreciates more than 1 in the medium and long term, thus improving the balance of payments. With the continuous development of modern economy, this process is getting shorter and shorter, generally from March to June. This requires a certain amount of foreign exchange reserves to prevent the J-curve effect of domestic currency depreciation.

(2) In the elastic method of adjusting the balance of payments, the existence of J-curve effect, the so-called J-curve effect, is often the opposite, whether at home or at the beginning of low depreciation. The balance of payments situation is worse than before, imports increase, exports decrease current account, and then it will improve. In most cases, currency depreciation will worsen a country's terms of trade, only internationally (see chart).

J-curve effect, depreciation will increase demand elasticity more than supply elasticity, improve balance sheet payment will delay import inertia, depreciate the first deteriorating export growth, and it is difficult to put it in place. This requires a certain depreciation of foreign exchange.