The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Specie-Flow Mechanism

  • William R. Allen
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_1460

Abstract

The ‘specie-flow mechanism’ is an analytic version of automatic, or market, adjustment of the balance of international payments. In competitive markets with specie-standard institutions, behaviour will lead to national price levels and income flows consistent with equilibrium in the international accounts, commonly interpreted in this context to mean zero trade balances.

Keywords

Balance of payments Cantillon, R. Comparative advantage Gervaise, I. Hume, D. Law of one price Malynes, G. de Marshall–Lerner condition Mercantilism Monetary approach to the balance of payments Price level Price-specie-flow mechanism Quantity theory of money Specie-flow mechanism 

JEL Classifications

F31 
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Bibliography

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  5. Yeager, L. 1976. International monetary relations: Theory, history, and policy. 2nd ed. New York: Harper & Row.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • William R. Allen
    • 1
  1. 1.