The Jay Curve

Why the 'Jay Curve'?

As a young professional with a strong interest in Economics, I wanted to share my passion and curiosity for the subject and post some of my articles. But what to call such an endeavour? As my name already featured as an Economics phenomenon, the answer was obvious - The Jay Curve!

A 'J Curve' is a graph where the line plotted falls at the beginning and rises gradually to a point higher than the starting point, forming the shape of the letter J. Specifically in Economics, the 'J Curve Effect' is a phenomenon whereby when a currency is devalued, the balance of payments deficit worsens before it improves. This is due to demand initially being price inelastic, however in the long term, demand becomes more price elastic, which causes the current account to improve.