The J-curve effect implies that the price elasticity of demand for imports and exports is more elastic in the short run than in the long run.

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The J-curve effect suggests that following a depreciation of a country's currency, the trade balance will initially worsen before it improves, implying that the price elasticity of demand for imports and exports is less elastic in the short run and becomes more elastic over the long run.

The J-Curve Effect Implies That the Price Elasticity of Demand