The Marshall-Lerner condition

The Marshall-Lerner condition


The Marshall-Lerner condition, which states that a currency devaluation will only lead to an improvement in the balance of payments if the sum of demand elasticity for imports and exports is greater than one, is named after English economist Alfred Marshall (1842-1924) and the Romanian born economist Abba Lerner (1905 – 1985).

Alfred Marshall

alfred masrall image

Abba Lerner

abba lerner image