Marshall–Lerner condition
Okay kiddo, let me break it down for you:
The marshall-lerner condition is a rule that helps us understand whether a country will see its economy improve or decline when it changes the value of its money, or currency.
Imagine you have some toys that you want to sell to people from other countries. You want to make sure that your toys aren't too expensive for people in other countries to buy, so you decide to make your currency, like dollars or euros, less valuable.
The marshall-lerner condition says that if you weaken your currency, making it worth less than it was before, two things need to happen for your economy to improve:
1. People from other countries need to want to buy your toys more than before, because now they are cheaper for them.
2. People in your own country need to buy less things from other countries, because now those things are more expensive for them.
If those two things happen, then more people will start buying your toys, and less people will buy things from other countries, which will help your economy. But if those two things don't happen, then weakening your currency won't help your economy, and might even make things worse.
So basically, the marshall-lerner condition is a way to check whether weakening your currency will help your country or not. It's like checking to see if changing the rules of a game will make it more fair or not.
The marshall-lerner condition is a rule that helps us understand whether a country will see its economy improve or decline when it changes the value of its money, or currency.
Imagine you have some toys that you want to sell to people from other countries. You want to make sure that your toys aren't too expensive for people in other countries to buy, so you decide to make your currency, like dollars or euros, less valuable.
The marshall-lerner condition says that if you weaken your currency, making it worth less than it was before, two things need to happen for your economy to improve:
1. People from other countries need to want to buy your toys more than before, because now they are cheaper for them.
2. People in your own country need to buy less things from other countries, because now those things are more expensive for them.
If those two things happen, then more people will start buying your toys, and less people will buy things from other countries, which will help your economy. But if those two things don't happen, then weakening your currency won't help your economy, and might even make things worse.
So basically, the marshall-lerner condition is a way to check whether weakening your currency will help your country or not. It's like checking to see if changing the rules of a game will make it more fair or not.