StudentShare solutions
Triangle menu

Bretton Woods Fixed Exchange Rate System - Essay Example

Nobody downloaded yet

Extract of sample
Bretton Woods Fixed Exchange Rate System

Money provides innumerable benefits in our day-to-day lives. In the classical theory, money played an insignificant role as it had no causative influence on the economy. In the opinion of classical theorists, money was purely confined to medium of exchange and related itself to economic activity.
Money was used as a technical instrument to overcome the complexities involved in barter system. There was strong opinion that money was a passive element, which was used to help in the process of exchange. Contrary to this, in modern economics money plays a significant and an active role. Modern economists emphasize that the most important function of money is to regulate the general economic activity and to promote the wealth and welfare of a country's economy. It further explains how money influences production, consumption and distribution. Thus, the institution of money is considered to be an efficient instrument contributing to economic prosperity of a country.
Due to the advent of globalization, financial markets are getting integrated with the passage of time, and people and firms are entering into more and more cross-border financial deals. In order to make these transactions feasible, a system for determination of the amount and method of payment of the underlying financial flows is needed. Since the domestic currencies of the parties involved will be different, the flows will take place in some mutually acceptable currency. The parties involved will then need to convert the amount involved into their domestic currencies. The set of rules, regulations, institutions, procedures, practices and mechanisms which determine the rate at which this conversion takes place and this rate of conversion is defined as the Exchange rate and the movements in the exchange rate over a period is called the international monetary system. This system forms the backbone of all cross-border transactions because it makes the settlement of international payments into one another and the transfer of funds across nations, which becomes possible due to the existence of the international monetary system. These transactions may be on account of international trade in goods or service, or due to acquisition or liquidation of financial assets, or because of creation or repayment of international credit. By making all these possible, a smoothly running international monetary system contribute to a more efficient utilization of world resources.
The Bretton Woods Fixed Exchange Rate System
The Second World War effectively stopped all international economic activity. Global economic growth was severely affected. On one hand, the warning nations suffered huge damages on account of the war, and on the other hand, most of the countries were suffering from hyper-inflation ((ICMR), 2003). The continuing war also made any co-operation on the economic front impossible. In this scenario, the need was felt for an economic system which would again make international ...Show more

Summary

Money is omnipresent. Modern society cannot run without it. We cannot think of a society today which can do away with money. Money has changed its form with timekeeping in tune with the different stages of development of the society. Money performs a number of functions and its importance lies in the fact that it acts as a medium of exchange, as a unit of account, as a standard of deferred payments and as a store of value.
Author : starksarai
Bretton Woods Fixed Exchange Rate System essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Bretton Woods Fixed Exchange Rate System"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

International Finance: (International monetary system 1925-1960)
They promote means of payment between buyers and sellers of different nations including deferred payments. It provides the framework for ensuring liquidity without fuelling inflation and corrects the global imbalances or restricts their emergence, while facilitating an orderly payment system.
9 pages (2250 words) Essay
International finance structure and IPE of international Debt
International monetary finance structure is explained in detail in chapter 7. The chapter begins by comprehensively throwing light upon the exchange rate. The math of exchange rate has been very well explained at the beginning of the chapter. The foreign exchange market diagram explains how the demand of goods produced in the United States changes the value of the Mexican Peso and based on that how the value of the United States Dollar changes.
5 pages (1250 words) Essay
Bretton Woods system Essay
The agreement's primary goal is the reconstruction and rebuilding of the international economy which was hugely devastated by the war. The Bretton Woods Agreement is a fully negotiated monetary order intended to govern currency relations among sovereign states.
5 pages (1250 words) Essay
Bretton Woods system
The moment is particularly favourable to open the discussion in these three directions, the mostly with the official signature, April 15 1994 in Marrakech, of the final Act of the Uruguay round, the loop was to some extent tied. Centre piece of the international economic order of post-war period, GATT joined thus the International Monetary Funds (the IMF) with the row of the great international economic institutions.
8 pages (2000 words) Essay
Applied international macroeconomics projet between 1956 1986
He established a strict one-party political system with a strong hold on economy and state resources and their allocation. One of Tunisia’s outstanding characteristics is its remarkable economic development, sustained over many decades and currently driven by a process of market liberalization and integration into world markets
4 pages (1000 words) Essay
The main cause of collapsing of the Bretton woods system
The main purpose of establishing this system was to rebuild those economies which had collapsed after the war utilizing the creation of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD) (Bird, 1994). The central
4 pages (1000 words) Essay
The Bretton Woods System
After the chaotic situation that led to the Great Depression, employment, stability and growth needed to be the primary components of public policy. The makers of the Bretton Woods Agreement were convinced that governments should take over public management of the economy as this would create a feeling of well being among citizens, reassuring them that a responsible body was in charge of their economic future.
6 pages (1500 words) Essay
Short Essay
The primary architects of Bretton Woods were Harry Dexter White and John Maynard Keynes. The initial institutions included the International Bank for Reconstruction and Development (IBRD) and the
8 pages (2000 words) Essay
Make an assessment of the achievements of the Bretton Woods Fixed Exchange Rate system
“Money has been a source of fascination to professionals from numerous fields of learning, and has been written about by
9 pages (2250 words) Essay
Bretton Woods international monetary system
This essay focuses on the main agreements, that were reached at the conference at Bretton Woods, with main sole aim of reviewing the performance of the gold standard after the occurrence of a great depression in the US. Main rules and policies for financial and commercial relations between industrial states were established at the Bretton Woods.
2 pages (500 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Click to create a comment
Contact Us