As Yen depreciates, Japan faces the Marshal Lerner condition.

Is this the Marshal-Lerner condition happening in real time? As I was teaching this a couple months ago I didn't find much in the way of real life examples. In fact, of the economics teachers that I know most of them had never, or only in passing, heard of this theory. Needless to say, it makes sense. Japan has recently devalued it's currency through a number of fiscal and monetary measure. This has caused a badly needed depreciation of the currency which should, and was hoped would, boost exports. This seems to have worked. On the flip side of the currency depreciation, imports should become more expensive leading consumers to purchase less. Those two things combined should create a more favorable trade balance and reduce or at least decelerate Japan's enormous national debt as it boosts GDP growth. However, it seems that the Marshal-Lerner condition has not been met. Exports have grown, but imports have not shrunk enough to have the desired impact. Economic thought would predict that consumers need time to adjust their spending habits and hopefully that will occur, otherwise the depreciation may be for naught.