Structural disequilibrium occurs due to business cycles. According to the Marshall Lerner condition, for a devaluation to have a positive eff ect on a country’s balance of payments the sum of the...

Structural disequilibrium occurs due to business cycles.

According to the Marshall Lerner condition, for a devaluation to have a positive eff ect on a country’s balance of payments

the sum of the absolute values of the elasticity of demand for its exports and imports should be greater than one.