adjustment programme

Quick Reference

A package of policy measures designed to cure balance-of-payments problems. Adoption of a satisfactory adjustment programme is frequently made a condition of assistance from the International Monetary Fund. Curing balance-of-payments problems requires decreasing absorption relative to production. This can be approached via reducing absorption, by cutting government spending, and/or increasing taxes. It can also be approached via increasing production by using resources more efficiently; this often involves increased use of the market mechanism and devaluation of overvalued currencies.

Subjects: Economics.

Reference entries