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European exchange rate mechanism (ERM) |
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European exchange rate mechanism (ERM)The system that countries in the European Union once used to pay exchange rates within bands around an ERM central value.European exchange rate mechanism (ERM) Similar MatchesAdjustment mechanismAdjustment mechanismThe theoretical process by which a market changes in disequilibrium moving toward equilibrium if the process is stable. See Walrasian and Marshallian adjustment. Specie flow mechanismSpecie flow mechanismUnder the gold standard, the mechanism by which international payments would adjust. A country with high inflation would export less, import more, and thus lose specie, i.e., gold. With the money supply fixed to the quantity of gold, the resulting monetary contraction would reduce prices. Due to David Hume. Price specie flow mechanismPrice specie flow mechanismAdjustment mechanism under the classic gold standard allowing disturbances in the price level in one country to be wholly or partly offset by a countervailing flow of specie (gold coins) that would act to equalize prices across countries and automatically bring international payments into balance. Price specie flow mechanismPrice specie flow mechanismSame as specie flow mechanism. Exchange Rate MechanismExchange Rate MechanismThe mechanism by which members of the EC formerly operated their currency exchange rates within given upper and lower limits. In January 1999 certain members of the EC adopted the euro for their currency. Further SuggestionsBalance of payments adjustment mechanismExchange Rate Mechanism Trade Policy Review Mechanism Dispute settlement mechanism Exchange Rate Mechanism (ERM) |
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