J-curve

just mentioned on CNBC…wow.

why did they mention it? you surely won’t miss this question on the exam then!

exam paper has been already set up 13 months ago

where is this even mentioned in the CFAI material? I missed it.

in the exchange rate area… Basically if domestic currency depreciates, the different short term and long term effects on the current account will shape the J curve.

If I recall when domestic currency depreciates it is painful in the short term, but once levels of exports pick up the effect is positive…thus the j shape (slight dip then rebounds).

basically, and I believe it was in pm.

yep just found it in PM. I was looking for it in economics. Pretty simple concept. I hope they test it.