Bretton Woods system - Essay Example

Only on StudentShare

Extract of sample
Bretton Woods system

The main features of the system are the following: an obligation for each country to adopt a monetary policy to main the exchange rate of its currency within a predetermined value, allowing only a fluctuation of 1% in terms of gold; and the establishment of the International Monetary Fund (IMF) which is tasked to curb and resolve temporary payment imbalances (Bretton Woods System 1-4). Recognizing that nations need a monetary reconstruction after the World War II, countries initially concur to implement the rules and policies as stipulated in the Bretton Woods Agreement. However, the large disparity among member nations in how they pursue economic development led to the eventual collapse of the system in 1971.
Each of the countries which signed their allegiance to the Bretton Woods indicates its recognition of four important factors. This uniformity becomes the cornerstone and the main factor which holds the international economy together. First, all the nations involved recognize and agree that "the interwar period had conclusively demonstrated the disadvantages of unrestrained flexibility of exchange rates" (Cohen 4). It can be recalled that the Great Depression in 1930s has become a grim reminder of how floating exchange rates discourages trade and investment while increasing the risk of destabilization and competitive depreciations. ...
Download paper


While the World War II is still raging in 1944, 730 delegates from all 44 Allied nations gathered at Mount Washington Hotel in Bretton Woods, New Hampshire which become the venue for the birth, deliberation, and formal institution of the Bretton Woods Agreements…
Author : emardregan

Related Essays

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....
9 pages (2259 words) Essay
English Legal System Essay
The impact, effect and influence of Community law on domestic law is dependent on the principle of supremacy of the former over the latter. The concept of supremacy of EC law is directly related to the principle of direct effect, direct applicability and self-execution. The first is pertinent to implementation while the others are to enforcement. It would certainly be impossible to achieve the objective of the Community if its laws cannot be implemented consistently among its members....
7 pages (1757 words) Essay
Operating System Essay
There are many uses of an operating system but this paper will focus upon the use of operating system related to Word Pad. "WordPad is a simple proprietary word processor that is included with almost all versions of Microsoft Windows from Windows 95 upwards. It is more advanced than Notepad, which is a rather basic text editor, but much more simple than Microsoft Word. It originated in Windows 1.0x as Write." ( Wikipedia, 10 September 2008). Word Pad provides the user with numerous facilities like formatting and printing the foramtted text. A user is free to choose the text size, the font...
3 pages (753 words) Essay
Management Information System Essay
Public transportation in the UK serves more than 75% of the total commuters' transportation in the UK as argued by Simon Taylor (2003)iii. Railways in the public transportation especially accounts for over 50% of the total market share in the public transport as identified by Simon Taylor (2003). This makes it clear that the rail transport market in the UK public transport industry not only forms an integral part of the public transportation but also contributes to the Gross Domestic Product. Alongside, the railway industry is also facing stiff competition from other forms of public transport...
18 pages (4518 words) Essay
Bretton Woods system
It is undeniable that in the current debate on the international economic co-operation, we miss historical prospect completely. Or at least, we do not want to remember us the context in which was set up what we can call the great sedentary project of post-war period, not more of the role that one intended to make play at the time each great institution in their respective field. It is not a question to reconsider a period, already completed, but at least to remember, on a side, that the Agreements of Bretton Woods belong to a great project which, was not going from there to be carried out, at...
8 pages (2008 words) Essay
The main cause of collapsing of the Bretton woods system
re of the system was a promise each country made to all that their monetary policies would keep the currency of the country close to a fixed value (within 1%) to gold. The IMF would have the authority to close temporary payment imbalances between countries and would monitor the fiscal activities of other nations. While the system worked well for several years, it collapsed in 1971 once the United States pulled out from the gold standard (Bird, 1994)....
4 pages (1004 words) Essay
Got a tricky question? Receive an answer from students like you! Try us!