| With regard to the relationship between currency depreciation and trade balance,the traditional theory holds that Marshall-Lerner conditions are sufficient and necessary conditions for currency depreciation to improve trade balance.This paper will study Marshall-Lerner conditions based on the premise of "supply constraints" in modern China.Applicability,while studying the applicability of the theory of Terms of Trade,and considering the relationship between currency depreciation and trade income and expenditure from the perspective of terms of trade.Specifically,this paper firstly demonstrates the total supply and demand situation of modern China(1887-1936)as a "supply-constrained" economic situation through history and logic,and then proceeds from the premise of modern China's "constrained-constrained" economic situation,through logic.Reasoning and empirical analysis study the applicability of the theory of Terms of Trade,and derive the conditions for improving the trade balance of modern Chinese currency depreciation through the relationship between Terms of Trade and trade balance,exchange rate and Terms of Trade,and propose that it applies to other “constrained constraints”."The speculation of the economy.Then,the logic analysis and empirical research on the applicability of Marshall-Lerner conditions in modern China are carried out,and the conclusions of the research are also applicable to the conjectures of other “constrained-constrained” economies.Our research results show that under the premise of modern China's “constrained-constrained” economic situation,Terms of Trade are applicable as indicators for evaluating trade performance.The reason is that supply cannot expand and increase exports,and the relative price of exports becomes trade.The main manifestation of interests,while the trade balance can represent trade interests in this context,so the conclusion that the terms of trade are positively related to trade balances,and then the necessity of depreciating the currency of modern China by the relationship between exchange rate and terms of trade The condition is that the product of the elasticity of import and export demand is greater than the product of the elasticity of import and export.On the other hand,Marshall-Lerner conditional theory is not applicable in modern China because it does not satisfy the premise of supply elasticity infinity.However,the elasticity of demand in Marshall-Lerner conditions is replaced by the amount of The price effect establishes the price elasticity calculated by the model,and it can be concluded that the necessary and sufficient condition for the currency depreciation to improve the trade balance is that the sum of the price elasticity is greater than one.Both logical analysis and empirical results show that the price elasticity of import and export commodities in modern China is relatively small,and the sum of import and export price elasticity is less than 1.The main reasons are as follows: First,there is no substitute capacity for imported products under “supply constraints”.The total supply “gap” material form is mainly capital goods,while the capital goods show the characteristics of rigid demand,which leads to the low price elasticity of imported products.The essence is that the demand elasticity is low.Second,the domestic supply cannot expand and expand under the “supply constraint”.Exports result in lower price elasticity of export commodities,and the essence is that supply elasticity is low.Finally,we will extend the research conclusions of modern China to “constrained-constrained” economies,and propose such a conjecture to ask for advice in the academic world: the “supply-constrained” economic situation does not apply Marshall-Lerner conditional theory,the revised Marshall-The condition of Lerner is also not established,that is,the sum of import and export price elasticity should be less than 1,and the depreciation of the currency will lead to the deterioration of the trade balance. |
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