Bretton Woods system

The Bretton Woods system of international economic management established the rules for commercial and financial relations among the world's major industrial states. The Bretton Woods system was the first example of a fully negotiated monetary order in world history intended to govern monetary relations among independent nation-states.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Preparing to rebuild global capitalism as World War II was still raging, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel, situated in the New Hampshire resort town of Bretton Woods, for the United Nations Monetary and Financial Conference. The delegates deliberated upon and finally signed the Bretton Woods Agreement during the first three weeks of July 1944.

Related Topics:
Capitalism - World War II - Allied nations - Mount Washington Hotel - New Hampshire - Bretton Woods - July - 1944

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Setting up a system of rules, institutions, and procedures to regulate the international political economy, the planners at Bretton Woods established the International Bank for Reconstruction and Development (later divided into the World Bank and Bank for International Settlements) and the International Monetary Fund. These organizations became operational in 1946 after a sufficient number of countries had ratified the agreement.

Related Topics:
Institutions - International Bank for Reconstruction and Development - World Bank - Bank for International Settlements - International Monetary Fund - 1946

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The chief features of the Bretton Woods system were, first, an obligation for each country to adopt a monetary policy that maintained the exchange rate of its currency within a fixed value—plus or minus one percent—in terms of gold; and, secondly, the provision by the IMF of finance to bridge temporary payments imbalances. In face of increasing strain, the system eventually collapsed in 1971, following the United States' suspension of convertibility from dollars to gold.

Related Topics:
Monetary policy - Exchange rate - Currency - Gold - IMF - 1971 - United States - Dollars

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Until the early 1970s, the Bretton Woods system was effective in controlling conflict and in achieving the common goals of the leading states that had created it, especially the United States.

Related Topics:
1970s - United States

~ ~ ~ ~ ~ ~ ~ ~ ~ ~