Riding the J-Curve PS-C6 ___________________________________________________  
THE HUGE AMERICAN trade deficit is still growing, and imports are still rising fast. In January, according to figures just published, this country imported $16.5 billion worth of goods more than it exportedÛÓanother melancholy record. The corrective machinery is already at work: The dollarÛªs exchange rate is falling. But itÛªs a cumbersome process, and the effects probably wonÛªt be visible until the end of this year.</br></br>Economists call it the J-curve, meaning that the deficit gets worse and the line dips down before it turns around and starts upward toward balance. The reason is that the financial markets that set the exchange rates move much faster than the real economy of boxes and bales of goods delivered on the wharf. In general it takes something over a year for the deliveries to be made, the contracts to come up for renegotiation and the importers to find domestic suppliers to replace their increasingly expensive foreign sources.</br></br>1984.	The rate then rose higher to a peak just a year ago and did not drop significantly lower until last summer. ThatÛªs why the trade accounts are unlikely to show any very great improvement until next fall.</br></br>cost more, it means a reduction in the American standard of livingÛÓunless Americans can raise their productivity. For the past year and a half, unfortunately, productivity in this country has been flat.</br></br>How much farther does the dollar have to sink to bring the trade accounts back into balance? It will depend on the quality and cost of American products, compared with the foreign goods with which they compete. Abroad, productivity continues to rise.