SUMMARYA balance of payments adjustment mechanism should be defined as ‘any balance of payments disturbance which can be deliberately initiated in order to correct some other disturbance’. The traditional mechanisms, based on changes in exchange rates, prices and incomes, can no longer be applied effectively because they are domestically impalatable. Consequently, governments have come to rely on new ways of initiating countervailing disturbances, among them (a) pressures on surplus countries; (b) changes in foreign tastes; (c) stimulating economic growth; and (d) forming or joining a customs union. In the present disequilibrium system, new adjustment mechanisms like these are being widely used, and are in fact becoming the only effective means for maintaining international equilibr