Policy Responses to COVID-19 and the Marshall-Lerner Condition: Lessons from the Crisis in Argentina

Abstract

The current crisis dominates everything from commerce to day-to-day life. But it will pass over within a relatively short space of time and the recession seems likely to reverse the long-standing pattern. Given the gravity of the circumstance, nations have been constrained to undertake unusual approach arrangements. This article proposes a framework of the COVID-19 effect following analysis and comparison of the most prominent concepts of the economic crisis and devaluation. Our paper helps to identify the positions of each of these concepts with regard to the balance trade and Argentina prosperity. This study enriches the literature on the Marshall-Lerner condition and J-curve effect by providing analysis of the devaluation scenario. Finally, areas of application and policy implications of the COVID-19 effect are explored in order to guide future research on the developing countries.