Académique Documents
Professionnel Documents
Culture Documents
Named for the Bretton Woods Monetary Conference which took place in New Hampshire, during July 1-22, 1944. 44 allied nations and one neutral US Treasury Harry Dexter White and Britains Treasury John Maynard Keynes collaborated for 2 1/2 years to formulate a plan for post-war recovery
History
Outcome:
1) Adjustable peg currency 2) Quotas embedded in the IMF which require member nations to pay a certain amount of money (to the Fund) 3) Members were forbidden to engage in discriminatory currency practices to prevent them from manipulating their price levels and exchange rates 4) The creation of the IMF and World Bank (International Bank for Reconstruction and Development) 5) The dollar standard
Problems
Post-war monetary relations were unstable The member nations underestimated the strength of their funds... after two years of lending, the IMF was drained of its money
Soon, the gold exchange standard becomes the dollar exchange standard
U.S. allows allies use of the system for their own benefit
Due to the costs of the Vietnam War and nations trading $ for gold, On August 15, 1971, President Nixon announced three changes in the U.S.s economic policy. (1) He imposed a 90-day wage-price freeze (2) He imposed a temporary tariff on imports. (3) The end of the Bretton Woods System
The link between gold and the dollar is severed Economies allow their currencies to float freely against the dollar Flexible exchange rates allow for countries to adjust to increased prices, as was seen in the oil price shocks of the 1970s The formation of the European Monetary System, to create fixed exchange rates between participating European nations Members of European Economic Community (now the EU) linked their currencies together
Results.
Sources
http://www.time.com/time/business/article/ 0,8599,1852254,00.html http://www.polsci.ucsb.edu/faculty/cohen/i npress/bretton.html http://www.imf.org
http://www.globalpolicy.org/component/co ntent/article/209/42675.html