adjustment mechanism — The changes in prices and quantities by which market forces eliminate balance-of-payments deficits and surpluses.
ASEAN — Association of Southeast Asian Nations. Members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
balance of trade — The difference between merchandise exports and imports. A positive (negative) difference indicates a trade surplus (deficit).
Balassa-Samuelson effect — The tendency for prices to rise rapidly in fastgrowing economies where the rapid increase of productivity in the tradablegoods sector induces increases in the demand for the products of the service sector.
Bank rate — See central bank discount rate.
beggar-thy-neighbor devaluation — An exchange rate devaluation by one country that, by compressing its demand for imports, leaves its trading partners worse off.
bimetallic standard or bimetallism — A commodity-money standard under which the authorities grant legal-tender status to coins minted with two metals (say, gold and silver). See also monometallic standard.
Brady Plan — Named after U.S. treasury secretary Nicholas Brady, this plan sought to normalize conditions in international financial markets following the debt crisis of the 1980s. Commercial banks were encouraged to issue securities backed by nonperforming loans to developing countries as a way of cleansing their balance sheets. The market for “Brady bonds” provided the platform for the resumption of lending to developing countries through the bond market in the 1990s.
brassage — The fee paid for coining precious metal under a commodity money standard. It covered the expenses of the mint master and allowed him a modest profit.
capital account — The component of the balance of payments that reflects foreign investment. A capital-account deficit signifies that outward investment exceeds inward investment.
capital controls — Regulations limiting the ability of firms or households to convert domestic currency into foreign exchange. Controls on capital-account