J Curve

J-curve - It is the theory that an internal rate of return of a fund will be low in its early stages, particularly due to costs that incurred in starting the fund but then as the firm or company becomes more stable and profitable that it internal rate of return will increase. The shape of this theory on a graph looks like a J. The other term for J-Curve is the country?s trade balance after it devaluates its currency. The immediate effect of devaluation is increase in the trade and this will shift into increase in international trades and demands. This will make the country exports increase due to the lower exchange rate.