Marshall-Lerner Condition

Could someone please try explain this concept to me? Struggling.

Cheers,

Your Macro Econ text says the as we depreciate our currency our balance of trade improves. Marshall - Lerner incorporates elasticity in this concept.

Suppose the weight of exports is “We” and the weight of imports is “Wi”.

Now according to the concept …

We*Ee + Wi(Ei-1) > 0

if this condition satisfies then you can say that depreciating our currency will have a positive effect on the balance of trades.

The balance of payment will improve with currency devaluation since exports value will increase and the net effect will be positive . This is called Marshall Lerner condition . Also the demand elasticity has to be greater than one.

I hope It is clear…

Thank you Chaps.