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Comments on: Neat example of the J-curve http://www.tvhe.co.nz/2013/02/20/neat-example-of-the-j-curve/ The Visible Hand in Economics Wed, 20 Feb 2013 21:17:00 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Matt Nolan http://www.tvhe.co.nz/2013/02/20/neat-example-of-the-j-curve/#comment-40537 Wed, 20 Feb 2013 21:17:00 +0000 http://www.tvhe.co.nz/?p=8300#comment-40537 In reply to Logan.

I’d also note that manufacturers are complaining about a lack of profitability, rather than a lack of output – so even with a J-curve effect, this still accounts to an income transfer from importers to exporters … solving that “issue”.

]]> By: Matt Nolan http://www.tvhe.co.nz/2013/02/20/neat-example-of-the-j-curve/#comment-40532 Wed, 20 Feb 2013 18:37:00 +0000 http://www.tvhe.co.nz/?p=8300#comment-40532 In reply to Logan.

Tis a nice example of how trying to fiddle “short term things” can throw around unintended consequences for sure.

I think the “manufacturing crisis” needs a broader context than “the dollar” – which is why I like the RBNZ speech yesterday!

]]> By: Neat example of the J-curve | Fifth Estate http://www.tvhe.co.nz/2013/02/20/neat-example-of-the-j-curve/#comment-40530 Wed, 20 Feb 2013 18:14:16 +0000 http://www.tvhe.co.nz/?p=8300#comment-40530 […] See full story on tvhe.co.nz […]

]]> By: Logan http://www.tvhe.co.nz/2013/02/20/neat-example-of-the-j-curve/#comment-40528 Wed, 20 Feb 2013 06:05:00 +0000 http://www.tvhe.co.nz/?p=8300#comment-40528 Every now and then the real world puts up an example that fits right in with even the most basic of theory.

The J-curve was one of the things that stood out in my international monetary paper. Mostly because it rarely get brought up when considering exchange rates. Even now, with all the talk of currency wars and so called manufacturing crises making the MSM, the J-curve is left out of the conversation.

To me the J-curve is the biggest reason not to jump in and manipulate the NZD down. I see current exchange rates as merely transitory until inflation fundamentals settle down. Unless it’s going to take longer than the short-term period the J-curve is negative (2-4 years??) to correct there is no benefit.

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