J-Curve Daniel Guidotti 14 years ago J-CurveTheory stating that the trade deficit of a country will first worsen following a depreciation of its currency as higher prices on overseas imports will more than balance out (in the short term) the smaller volume of imports.Recommended for you:J-Curve Effect Theoretical Spot Rate Curve Flattening of the Yield Curve Steepening of the Yield Curve