Quick Definition

The J-Curve is a graphical representation that shows an initial decline followed by a significant improvement over time.

Examples

• 1In private equity, investments often show a J-Curve effect where initial returns are negative due to setup costs, but improve significantly as the business matures.
• 2In economics, a country's trade balance might initially worsen after a currency devaluation before improving, demonstrating a J-Curve.
• 3After implementing a new business strategy, a company may experience initial losses followed by substantial gains, illustrating a J-Curve pattern.

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