Was the Bretton Woods System successful?

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What was the Bretton Woods System? The end of the World War II marked the beginning of a new era for the world economy. The Bretton Woods System refers to an agreement made at an international conference between 44 nations in 1944 at Bretton Woods, New Hampshire, United States of America (hereby U.S.) on the 22nd of July 1944. It was aimed at maintaining stability in the monetary system in the post World War II period. “In an effort to free international trade and fund postwar reconstruction the member states agreed to fix their exchange rates by tying their currencies to the U.S. dollar.” The fundamental of this system was liberalizing trade policy and promoting free trade. The U.S. dollar was linked to gold as a show of its dependability in the eyes of the rest of the world, $35 equaled 1 ounce of gold. They followed an adjustable fixed exchange rate (1% band). It set up the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which is a part of the World Bank today. Member nations monetary contributions to the setting up of these institutes determined their number of votes as well as their economic prowess In this essay, we initially examine what led to the end of the Bretton Woods System. Although several factors have been identified, the ones highlighted in the essay look at the ‘Growth in capital mobility’ during that period and the ‘Role of the United States’, which is further elaborated in Section I of the essay. Under Section II, the essay aims at analysing the performance of the Bretton Woods System. The analysis is done on the basis of looking at the ‘Role in the transition of economies post World War II ‘ and ‘Growth of trade’ during that period. Factors that led to... ... middle of paper ... ...M. "INTERNATIONAL CAPITAL MOBILITY IN HISTORY: PURCHASING-POWER PARITY ~ THE LONG RUN." National Bureau of Economic Research. Sept. 1996. Web. 15 Apr. 2014. . • Terborgh, Andrew. "The Post-War Rise of World Trade: Does the Bretton Woods System Deserve Credit?” Department of Economic History, London School of Economics. Sept. 2003: p. 1-73.Web. 13 Apr. 2014. . • "The Dollar Glut." International Monetary Fund. N.p., n.d. Web. 20 Apr. 2014. . • Ward, Bill. “The Death of Bretton Woods.” Sept. 2003: p. 1-3. Web. 12 Apr. 2014. < http://cherokee.agecon.clemson.edu/gip9.pdf >. • "What is Bretton Woods System?" Learn Economy. N.p., 21 Aug. 2013. Web. 15 Apr. 2014. .

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