Marshall-Lerner condition


The condition that the sum of the elasticities of demand for exports and imports exceed one (in absolute value); that is, ?X + ?M > 1, where ?X, ?M are the demand elasticities for a country's exports and imports respectively, both defined to be positive for downward sloping demands. Under certain assumptions, this is the condition for a depreciation to improve the trade balance, for the exchange market to bestable, and for international barter exchange to be stable.
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Marshall Plan martingale system